Gasoline Prices Rise in State, Nationwide
California gasoline prices jumped for the third straight week, the Energy Department reported Tuesday, and analysts said the recent surge in oil prices to near-record highs could lift pump prices even more.
The state’s average price for self-serve regular climbed 4.5 cents to $2.457 a gallon in the week ended Monday, the agency’s Energy Information Administration said in its weekly pricing survey.
The price has shot up 12.4 cents a gallon in the last three weeks and is 25.3 cents a gallon higher than a year ago, the EIA said.
The national average for regular gas inched up 1.1 cents to $2.226 a gallon in the latest week, the agency reported.
Pump prices could become even more expensive because crude oil prices are again hovering near $60 a barrel, said Barry Pulliam, a senior economist at Econ One Research Inc. in Los Angeles.
“Given that we’re also in the summer, at the height of the driving season, it wouldn’t surprise me at all to see gasoline prices continue to rise,” he said.
The U.S. benchmark grade of light crude oil for August delivery traded as high as $60.10 a barrel Tuesday before settling at $59.59, up 84 cents from Friday, on the New York Mercantile Exchange. U.S. markets were closed Monday for the Independence Day holiday.
On June 27, oil hit an intraday high of $60.95 a barrel and then closed at $60.54, a record high since oil futures began trading on the Nymex in 1983.
Oil and gas prices are high because demand keeps growing worldwide at a time when supplies are relatively tight, most analysts say. The prices also reflect traders’ fear that any disruption in those supplies could send prices soaring.
Indeed, analysts said oil prices drew strength Tuesday from Tropical Storm Cindy in the Gulf of Mexico, which forced some oil companies to evacuate oil and natural gas production platforms and drilling rigs. Last year, Hurricane Ivan and other storms substantially disrupted that region’s energy operations.
Gasoline futures on the Nymex jumped 3.33 cents to $1.682 a gallon Tuesday, while heating-oil futures rose 2.13 cents to $1.732 a gallon.
In California, the average gasoline price hit a record high $2.592 a gallon in the week ended April 11, then turned lower for two months as industry data showed ample supplies. With the onset of the summer vacation season, gas prices have moved up in tandem with oil prices.
And rising oil prices are the main cause of higher gasoline prices, the Federal Trade Commission concluded in an analysis released Tuesday.
“Some observers suggest that oil company collusion, anti-competitive mergers or other anti-competitive conduct -- not market forces -- may be the primary cause of higher gasoline prices,” the FTC said in its 166-page report.
Instead, the price of oil “is the most important factor in the price of gasoline,” the agency said. “The vast majority of the FTC’s investigations have revealed market factors to be the primary drivers of both price increases and price spikes.”
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Associated Press was used in compiling this report.
