Gas Prices in State Rise for 2nd Week in a Row

Californians got hit with higher gasoline prices for the second week in a row as the statewide average cost of regular jumped 5 cents over the seven-day period ended Monday, to $1.667 a gallon, according to a federal survey.

The move mirrors a rise in the retail cost of fuel nationwide -- which rose 5 cents to an average of $1.56 a gallon -- and suggests that California’s most recent increases stem from broad characteristics of the market, such as rising crude oil prices, lower inventories and the steady demand for gasoline.

The price of crude oil, which accounts for 45% of the retail price of gasoline, hit its highest level in 10 months Monday, closing up 41 cents at $34.91 a barrel on the New York Mercantile Exchange.

Experts also point to chronically low oil inventories that leave firms and their customers more vulnerable to changing market conditions, such as the sudden blast of cold weather on the East Coast recently.

Some analysts said they believed the Bush administration was exacerbating the problem by siphoning off commercial supplies of oil to boost the nation’s Strategic Petroleum Reserve -- a move that has become controversial in light of very low oil company inventories, said John Kingston, global director of oil at Platts, a trade publication.

Those factors are helping drive gasoline prices higher across the country. New York edged out California by a penny for the top statewide average cost of regular, which was $1.67 on Monday, according to the Energy Information Administration, a division of the Department of Energy that publishes a weekly survey of gasoline prices.

Among 10 major cities surveyed by the EIA, Los Angeles had the highest average price, $1.691, and San Francisco was second, at $1.684.