Gasoline Prices Jump Across the U.S... Why?

Submitted by SadInAmerica on Mon, 05/11/2009 - 11:39am.

The average price per gallon of self-serve regular climbs 6.9 cents to $2.424 in the state and 16.2 cents to $2.240 nationally, the government's weekly survey of fuel stations shows.

With rising oil prices providing a brisk tail wind, gasoline prices jumped during the last week, rising nearly 7 cents a gallon in California and more than 16 cents across the U.S., the Energy Department said Monday.

The average price per gallon of self-serve regular gas in California rose 6.9 cents to $2.424, according to the government's weekly survey of fuel stations. Nationally, the average increased 16.2 cents to $2.240, led by the Midwestern states, which saw a bump of 20.6 cents.

The previous week, gas prices rose 1.5 cents in California, while the national average increased 2.9 cents.

But gasoline is still a lot cheaper than it was last year. At this time in 2008, a gallon of regular gasoline cost an average of $3.919 in California and $3.722 nationally.

Analysts have been betting that crude oil will hit $60 a barrel soon, based on last week's 10% price surge on the New York Mercantile Exchange. On Friday crude reached its highest point this year -- $58.63 a barrel. But crude for June delivery slipped 13 cents Monday to $58.50 a barrel.

With a 'more-than-plentiful supply of crude oil' priced into the market, recent increases in gas and crude prices shouldn't revive fears of another march toward $3 a gallon, said Tom Kloza, chief oil analyst with Oil Price Information Service in Wall, N.J.

"I would say the chance of $3-a-gallon gas this year is similar to tests coming out here in the next few days that Manny [Ramirez of the L.A. Dodgers] was completely clean and was misdiagnosed a prescription by his doctor," he said. "I just don't see that happening."

Kloza added that he was "pretty convinced that this is a year of much more temperate fuel prices given the economy we're in."

He expects prices to rise an additional 15 to 20 cents a gallon at the most, then stabilize after Memorial Day because demand is sluggish.

Nathan Olivarez-Giles - May 11, 2009 - source LATimes

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Submitted by SadInAmerica on Mon, 05/11/2009 - 11:39am.