US gasoline, diesel prices record rise
NEW YORK (AP) - April 11, 2008 Retail gasoline rose 0.8 cents to a national average of $3.365 a
gallon, although drivers in California could expect to pay nearly
30 cents more for regular and over $4 a gallon for higher grades,
according to AAA and the Oil Price Information Service.
The increase marks the latest in a series of retail gasoline
records in recent weeks, and leaves drivers paying 56 cents more a
gallon now than they did a year ago. And there may be more to come.
"We do think prices, particularly for self-serve regular, are
going to continue to go up," AAA fuel price analyst Geoff
Sundstrom said.
Oil prices also edged higher in a late-day push, but remained
more than $2 below an all-time high set earlier in the week. Light,
sweet crude for May delivery rose 3 cents to settle at $110.14 on
the New York Mercantile Exchange.
Analysts expect gasoline prices will continue to set records as
more drivers take to the roads as summer approaches and refineries
complete their conversion to more expensive summer-grade fuel. It
is unclear how high prices will go, however, because a bigger fuel
bill could convince some drivers to cut back.
"I still do not believe there's enough strength in demand that
it's going to justify that move to $4 a gallon" nationwide, said
Tom Kloza of the Oil Price Information Service in Wall, N.J.
Retail diesel prices rose 2.1 cents to $4.066, topping the
previous high set a day earlier. The spike in the key
transportation fuel is significant because it affects the cost of a
wide range of goods - meaning that even Americans who don't drive
will feel the pinch.
"Its obviously a very distressing situation for the commercial
transportation sector," Sundstrom said.
An unexpected decline in U.S. crude and gasoline inventories
drove oil prices to a trading record of $112.21 a barrel on
Wednesday amid concerns about inadequate supplies. Prices fell
Thursday.
Jim Ritterbusch, president of Ritterbusch & Associates in
Galena, Ill., said the tepid performance later in the week was the
result of traders looking to lock in their gains before the
weekend.
"The main thing I see is just profit-taking after we ran things
up to a record high," he said. "There's a strong possibility
we'll see new record highs again next week."
Crude prices were under pressure for most of Friday after the
International Energy Agency lowered its global oil demand forecast
for the year by 310,000 barrels a day to 87.2 million barrels a
day, citing lower economic output expectations in the U.S. and
elsewhere.
"The suspicion is it's not just the U.S. that's going to see a
slowdown," Kloza said. "I think it's significant, but I also
think the would-be sellers ... are probably not yet convinced."
The U.S. dollar strengthened against the euro and the pound,
which also helped keep crude prices from overheating further.
Crude oil's recent run has been largely attributed to the
steadily depreciating U.S. currency. A weakening dollar attracts
investors to commodities as a hedge against inflation, but when the
dollar rises, the effect tends to reverse as oil also becomes more
expensive to investors overseas.
In other Nymex trading Friday, heating oil futures rose 0.35
cent to settle at $3.1975 a gallon, while gasoline futures rose by
1.52 cents to settle at $2.8073 a gallon. Natural gas futures
slipped by 19.7 cents to settle at $9.901 per 1,000 cubic feet.
In London, Brent crude futures rose 55 cents to settle at
$108.75 a barrel on the ICE Futures exchange.