U.S. retail gasoline prices fell 7 cents over the last week to $3.60 a gallon as of Monday, the second consecutive drop this month, the U.S. Energy Department said.
The national price for regular unleaded gasoline dropped remained 85.9 cents higher than it was a year ago, the department said.
This is the second week in a row that gasoline prices have declined, following five weeks of increases.
Optimism that European leaders will come up with solutions to the region's debt crisis drove oil prices up on Monday.
Oil prices, which account for about 65 percent of the cost of making gasoline, traded up $2.50 on the New York Mercantile Exchange to settle at $87.88 a barrel on Monday.
While oil prices have begun to recover from their steep slide at the beginning of August, they remain well below levels around $100 a barrel hit last month.
Diesel prices fell 6.2 cents week-on-week to $3.84 a gallon, though that was still up 85.6 cents from a year ago, the department said.
(Reporting by Malathi Nayak; Editing by Marguerita Choy)