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Friday, May 16, 2003

Gas prices dropping as holiday approaches WASHINGTON — Gasoline prices dropped to just under $1.50 a gallon nationally this week reflecting a steady decline that the government says is likely to continue well into what is expected to be a heavy summer driving season.

The nationwide average of regular grade gasoline dipped to $1.496, the lowest since January, according to a survey by the American Automobile Association. It had been at a record high of nearly $1.73 a gallon in mid-March.

The price decline, reflecting lower crude oil prices and a growth in gasoline inventories in recent weeks, came despite growing demand and expected heavy highway travel this summer.

The AAA motorists' club said that it expects 29 million people to take road trips over the upcoming Memorial Day weekend, the traditional start of the summer travel season. Its requests for trip maps was up 16 percent, compared to just before the war began in Iraq, the group said.

Earlier this week, the government's Energy Information Administration put gasoline prices nationwide at $1.49 with expectations that prices would continue to decline in coming weeks, averaging about $1.46 over the summer months.

That would be about 10 cents a gallon higher than last year's summer average, but dramatically lower than the record high of $1.73 reported by the EIA on March 17, two days before the outbreak of war with Iraq.

30-year mortgages fall to record low WASHINGTON — Rates on 30-year mortgages dropped to a record low this week, the sixth time that has happened this year.

The average interest rate on a fixed-rate 30-year mortgage fell to 5.45 percent, down from 5.62 percent the week before, Freddie Mac, the mortgage company, reported Thursday in its weekly nationwide survey.

This week's rate surpassed the previous low of 5.61 percent, set the week ending March 14. The new rate is the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that reach back earlier indicate that the rate is the lowest in more than four decades, economists said.

Low mortgage rates propelled home sales to record levels last year. This year is shaping up to be the second-best on record for sales of existing homes and new ones, economists say.

For 15-year fixed-rate mortgages, a popular option for refinancing, rates declined to 4.84 percent this week, compared with last week's 4.97 percent rate.

Rates for one-year adjustable mortgages, however, nudged up to 3.67 percent, from 3.66 percent last week.

United to restore 162 cut flights CHICAGO — United Airlines, citing a recent improvement in bookings, is restoring 162 daily flights next month that had been cut from its April and May schedules because of a drop in demand during the Iraq war.

The nation's No. 2 carrier, hopeful of a busy summer travel season, said in announcing the revisions Thursday that the additional flights are to domestic, European and Pacific destinations. No markets were eliminated during the two months of scaled-back flights.

United, which is restructuring in Chapter 11 bankruptcy, will now operate 1,722 daily flights in June, up from 1,560 in May. It is the largest carrier at Denver International Airport.

The move is a sign of improving prospects for both United and the battered airline industry, which remains mired in its worst slump ever.

After putting new labor contracts into effect this month that will reduce its annual expenses by more than $2.5 billion, United has said it intends to focus on ways to raise revenue. The carrier hopes to launch a low-fare carrier by early 2004.

Qwest delays release of 2002 statement DENVER — Qwest Communications International announced Thursday that it would delay the release of its audited 2002 annual report until July 15.

Qwest sought the extension because it is continuing to restate earnings reports from 2000 and 2001 that will affect the 2002 results, the Denver-based telecommunications giant said in a press release.

The 2002 financial report was initially due March 31, but lenders of the Qwest Services Corp. credit facility and QwestDex term loan have granted Qwest two-month extensions twice.

Janco Partners analyst Tom Friedberg predicted the delay would have few implications.

"If it continues to drag on, I would imagine the banks would agree to another waiver, he said.

Qwest auditor KPMG-LLP may not sign off on the audited results until the Securities and Exchange Commission completes its investigation into Qwest's accounting of network capacity swaps, equipment sales and other transactions, Friedberg said.

Copyright © 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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