Gas rises above $3.75 a gallon; oil dips
NEW YORK (AP) - May 14, 2008 At the pump, the average national price of a gallon of regular
gas rose 2.6 cents overnight to a record $3.758 a gallon, according
to AAA and the Oil Price Information Service. Gas prices are 67
cents higher than a year ago, and are expected to continue rising
at least until the Memorial Day weekend.
The Energy Department recently forecast that prices will peak
next month at a monthly average of $3.73 a gallon. But that means
prices may rise well above that level at times; many analysts
expect prices to reach $4 a gallon on a national basis in coming
weeks.
Gas prices typically peak around Memorial Day, then decline
through the summer. But some analysts are beginning to question
whether that will happen this summer, noting that oil prices have
doubled over the past year and show little sign of slowing their
advance.
High fuel prices have cut demand for gasoline and oil, but that
has had little impact on prices. In its weekly inventory report,
the Energy Department's Energy Information Administration said
gasoline demand fell slightly last week.
"As the Memorial holiday approaches and with it, the unofficial
start to the summer driving season, we wonder if the gasoline
market in the United States has finally reached ... the point at
which consumers alter their purchasing behavior based on the dollar
rise in gasoline at the pump," said Stephen Schork, an analyst and
trader in Villanova, Pa., in a research note.
A sharper downturn in demand could pull gas prices lower,
analysts say. There are already indications high prices are
prompting some people to change their summer travel plans. A new
Rand McNally survey says two-thirds of Americans planning road
trips this summer are either altering their plans to shorten their
trips or canceling altogether.
Meanwhile, light, sweet crude for June delivery fell $1.05 to
$124.75 a barrel Wednesday on the New York Mercantile Exchange.
While lower, oil futures recouped some of their earlier losses
after the EIA report said crude inventories rose by 200,000 barrels
last week, less than the expected 2.5 million barrel jump analysts
surveyed by research firm Platts had expected.
Oil prices hit a trading record of $126.98 a barrel Tuesday. Oil
prices may be more volatile in coming days as investors square
positions ahead of the June contract's expiration next week.
In other Nymex trading Tuesday, June gasoline futures fell 1.41
cents to $3.1859 a gallon. The EIA said gasoline supplies fell by
1.7 million barrels last week; analysts had been expecting a
decline of only 800,000 barrels.
"There's no incentive for refiners to make (gasoline) because
they're not selling it," said Phil Flynn, an analyst at Alaron
Trading Corp. in Chicago.
June heating oil futures fell 4.07 cents to $3.6582 a gallon
after the EIA said inventories grew by 1.4 million barrels last
week, 27 percent more than expected.
June natural gas futures rose 17.3 cents to $11.595 per 1,000
cubic feet.
In London, June Brent crude fell $2.01 to $122.09 a barrel on
the ICE Futures exchange.
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Associated Press Writer George Jahn in Vienna, Austria and AP
Business Writer Thomas Hogue in Bangkok, Thailand, contributed to
this report.
