At the gas pump, sighs of relief (with VIDEO)

For someone who had just pumped more than $100 worth of diesel into his pickup truck, Terry Berry was remarkably composed.

Friday morning at a Tom Thumb store on U.S. Highway 98 in west Okaloosa County, unleaded regular was selling for $3.59.9 a gallon. That was 1 cent cheaper than at two other convenience stores near there.

"It's cheaper here," said Berry, who owns Berry's Well Drilling. "There can be 20 or 30 cents difference in Fort Walton. ... We need all the help we can get."

Berry pumped 27.59 gallons of diesel at $4.34.9 a gallon into his 2007 Chevy 3500 pickup. He paid $120.01.

Nearby, Gloria Donaldson of Fort Walton Beach was pumping 17.52 gallons of regular unleaded into her 2007 Chevy Silverado. That rang up at $63.07.

Because her family's Donaldson Racing Team competes at dirt tracks in Baker and Milton, that means extra miles traveled each week even before they start buying special Shell racing fuel.

"I come up here as much as twice a week," Donaldson said.

She called the recent retreat from $4 a gallon "a huge deal, absolutely, for everybody. Because as soon as gas prices come down, everything else goes down. I also have this little business where I make bird toys. So when gas goes up, the price of wood goes up. When the price of gas goes down I make a little bit more money."

Will prices keep dropping, even with Labor Day approachng?

"We have a distinct opportunity to see them go lower," said Jim Smith, president of the Florida Petroleum Marketers & Convenience Store Association.

There are two main factors.

"First, demand is at a 26-year low, and that means the consumer needs to pat themselves on the back," Smith said. "Second, the federal legislature finally decided to look into oil speculators. And even though no law has been passed, it probably panicked them."

In early July, oil was selling for $145 a barrel. Friday afternoon it was trading at about $111. It had started out the day at about $114.

"Those numbers are for September delivery," Smith said.

A barrel contains 42 gallons of oil. "

"So at $114 a barrel, you have a base crude oil cost $2.71," said Smith. "Then you add 30 cents refining and distribution."

After that comes federal, state and local taxes. In Okaloosa and Walton counties, that combined number is 49.6 cents, Smith said. In Santa Rosa the number is 48.6 cents. That all adds up to about $3.50 a gallon.

"We could probably be there as long as it holds, but the price per barrel is a volatile, unstable number," Smith said.

And what about that possible Labor Day bump?

"It's not gonna happen," Smith said flatly. "There's no fundamentals to force it back up. Barring any major catastrophe somewhere in the world, there's no indication, not from the consumers, speculators or oil companies, that there's going to be a bump."

Daily News Business Editor Thomas J. Monigan can be reached at 863-1111, Ext. 1438.