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Gas prices begin to level off

Gasoline prices are finally starting to level off — just as Easter vacation ended.

After several weeks of steady increases, AAA Northern California reported this week that the worst may be coming to an end.

At least for now. Summer's just around the corner, so fuel price hikes likely won't be a surprise.

The latest report from AAA, released Tuesday, shows that only one of the 25 metro areas where gas prices are tracked increased by more than single digits since the last survey March 9.

The statewide average for a gallon of unleaded gas was $3.11 as of Tuesday, up just 4 cents from a month ago. AAA reported that pump prices in the Modesto area rose on average by 2 cents to $3.06 for the same period.

Modestogasprices.com, a Web site that also tracks prices, put the Modesto-area average at $2.91 Thursday. A week ago it was $3.05 a gallon and a month ago it was $2.96, according to the site.

AAA put the national average at $2.86, up a dime.

Matt Skryja, a spokesman for AAA, said the increases have slowed as oil investors see continued signs of a sluggish economy.

"Shaky employment figures and weak demand for gasoline are helping to keep prices at the pump from skyrocketing even higher," he said.

In the Northern San Joaquin Valley on Friday, the latest figures from the state showed employment rates continuing to rise, hovering near or above 20 percent.

The unemployment crisis combined with the housing market slide have put the squeeze on consumers' pocketbooks as they struggle to pay mortgages, buy groceries, keep up with credit card debt and stay current with utilities.

But experts insist there are other factors at play in the leveling off of fuel prices. They say crude oil traders often look to stock markets as a barometer of overall investor sentiment.

Oil prices settled near $83 a barrel Friday after the government accused Goldman Sachs of fraud, earnings from some top companies disappointed investors, and data on single-family home construction declined.

Benchmark crude for May delivery fell $2.27 to settle at $83.24 a barrel on the New York Mercantile Exchange. Earlier it dipped as low as $82.52.

Experts also consider broader economic conditions in their trades, said PFGBest analyst Phil Flynn, who believes recurring worries about Greece's debt problems are strengthening the dollar and pushing down crude prices.

A stronger dollar makes crude more expensive for investors holding other currencies.

"The more you look at the supply-demand part of equation, the more you realize that the price of oil is based on macro-economic issues like currency exchange rates and interest rates more than how many barrels we have put away," said Flynn.

Oil prices have stayed in the mid-$80 range since jumping 25 percent in two months, to above $87 last week.

But the peak summer driving season is just around the corner. As temperatures rise, so too does the demand for gas and with it higher pump prices.

Bee news service contributed to this report.

Bee City Editor David W. Hill can be reached at dhill@modbee.com or 578-2336.

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