Is the oil bubble breaking?

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By The Associated Pess

Prices at the pump pulled back from record highs Friday as another slide in oil prices finished off crude’s biggest one-week drop in more than three years.

The price of gasoline dropped a penny or two.  If crude prices hold or fall even lower, drivers may see further relief at the pump in the coming days.

Is it time to declare the energy bubble over? Experts aren’t ready to go that far just yet. Oil has bounced back repeatedly from big drops this year.

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But sentiments are shifting. Experts who just days ago thought the market’s meteoric run still had legs are growing cautious. Some say last Friday’s high above $147 a barrel may be the last record the market sees — for now.

“If this is not the bubble’s implosion, than it’s a reasonable facsimile,” analyst and trader Stephen Schork said in his daily market commentary. “Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view.”

Oil’s drop may have an immediate effect, as gas station owners desperate to get drivers back to the pump consider a pre-emptive cut in price.

The price for a gallon of regular fell to $4.105, down nearly a penny, according to AAA, the Oil Price Information Service and Wright Express. Diesel prices also eased, dipping three-tenths of a cent to $4.842 a gallon.

In Lincoln, AAA’s posted average price for regular gasoline was $4.062 on Friday, down from $4.089 the day before, but still a more than a dime higher than it was a month ago, and  almost 80 cents higher than it was a year ago.

“We could see the nationwide average drop down to $4 or perhaps lower than that. And we think that could happen relatively quickly ... within the next couple of weeks,” said Geoff Sundstrom, a national spokesman for AAA.

Light, sweet crude for August delivery fell 41 cents to settle at $128.88 a barrel on the New York Mercantile Exchange.

A barrel of oil is now more than 10 percent cheaper than it was at the start of the week.

But consumers have been jolted repeatedly by unheard of gas prices, and immense changes in how consumers, particluarly American consumers live are already in motion.

Car buyers have been fleeing to more fuel-efficient models as gas prices have climbed beyond $4 per gallon. U.S. sales of pickups and sport utility vehicles are down nearly 18 percent this year through June, while sales of small cars are up more than 10 percent.

While slashing production of more-profitable trucks and sport utility vehicles, automakers have been scurrying to build their most fuel-efficient models faster.

The  mild drop in oil prices Friday followed a three-day swoon in which they tumbled nearly $16. Just last week, oil hit an all-time high above $147 a barrel.

If oil buyers sense that the slide was overdone, the impact will be felt almost immediately by everyone.

“If (oil prices) rebound, you’re going to see a quick reaction at the gas station, beceause their profit margins are so stretched,” Sundstrom said. “They may be very fast bringing prices back up.”