Gasoline Prices Up on Mideast Worries
Retail gasoline prices ticked higher across the country over the last week, a federal survey showed Monday, as crude oil prices clung to near-record-high levels in response to ongoing violence in the Middle East.
The nationwide average cost of self-serve regular gasoline rose 1.6 cents to $2.989 a gallon Monday, according to a weekly survey by the Energy Department. In California, the statewide average increased by the same amount over the last seven days to $3.24 a gallon, the government said.
In New York, crude oil prices retreated Monday but stayed within striking distance of $80 a barrel. The oil futures price fell $1.73 to $75.30 for August delivery of a barrel of benchmark light, sweet crude, down from Friday’s record-setting close of $77.03 a barrel.
Oil traders were encouraged that fighting between Israel and militants in Lebanon didn’t spread to Syria and oil-rich Iran over the weekend, said Phil Flynn, senior market analyst at Alaron Trading Corp. The emergence of international diplomatic efforts to halt the violence also helped ease market fears about potential disruptions in oil exports.
“All of that brought the market down pretty good,” Flynn said. “I think that was a big sigh of relief for the market.”
However, the world geopolitical situation remains fragile, Flynn warned. “We’re one headline away from oil going to another record high,” he said.
Gasoline prices also eased Monday on the New York Mercantile Exchange, declining nearly 4 cents to $2.285 a gallon for regular gasoline for August delivery.
It is unclear how much higher prices will go at the pump, Flynn said.
Oil prices that remain in record-high range and steady demand from consumers point toward additional increases. But the summertime peak driving season is starting to wind down, and strong fuel production combined with ample imports have kept supplies from dwindling, which suggests that retail gasoline costs could soon fall, Flynn said.
Over the last week, the California retail results were mixed for gasoline.
Monday’s federal survey showed that the average pump price in Los Angeles edged up less than a penny to $3.287 a gallon, and in San Francisco the average dropped less than a penny to $3.198 -- yielding an unusual 9-cent discount for motorists in the northern part of the state.
State figures show that refinery profits appear to have stayed strong in California despite the higher crude oil prices.
The per-gallon margin for fuel producers here -- which was 30 to 40 cents at the start of 2006 -- totaled 80 to 89 cents a gallon July 10, according to the California Energy Commission. The margin is the price that oil companies get for their gasoline and other products, minus the cost of crude oil, a refiner’s largest and most volatile expense.
The refinery margin in California peaked at more than $1 a gallon in May, when the statewide average price of gasoline hit a record $3.332 a gallon. Analysts expect strong refining margins to help oil companies post another round of strong profits when they report second-quarter results starting next week.
