Growing Demand for Gasoline Keeps Pump Prices Climbing

As motorists around the country dig deeper to fill up, analysts warned Monday that rising gasoline prices wouldn’t make a U-turn anytime soon because of brisk demand, tight supplies and expensive oil.

“Last year, people were saying ‘no mas’ to gasoline prices. Now, they are just saying ‘mas,’ ” said Automobile Club of Southern California spokesman Paul Gonzales.

California drivers paid an average of 3.5 cents more Monday for a gallon of self-serve regular gasoline compared with a week earlier, and the average U.S. price increased 3.9 cents a gallon, the Energy Department said.

That put the average cost of self-serve regular gasoline in California at $3.224 a gallon, almost 70 cents above the year-earlier level, according to the government’s weekly survey of about 800 U.S. filling stations.

The U.S. average reached $2.973 a gallon, up nearly 65 cents from a year earlier. It was the highest U.S. average since Hurricane Katrina pushed gasoline to a record $3.069 a gallon Sept. 5.

The Energy Department said that gasoline was cheapest in Gulf Coast states at $2.85 a gallon, up 2.5 cents for the week.

California had the most expensive gasoline in the survey, which didn’t include Hawaii, where prices usually top those in other states.

Despite the fuel-pump sticker shock, gasoline demand -- the estimated volume sold at the wholesale level -- was robust during the week ended June 30 at more than 9.6 million barrels a day, the Energy Department said Thursday.

“Gasoline demand has been this high less than a half dozen times, and the record high of just over 9.7 million barrels a day may well be topped in July or August,” according to an analysis of the data by Oil Price Information Service, a Wall, N.J., company that tracks fuel markets.

Gasoline inventories grew by 700,000 barrels to 213.1 million barrels, about a 22-day supply.

Tom Kloza, chief oil analyst for Oil Price Information Service, said Americans were paying $279 million more a day for gasoline than they did a year ago but still were buying more fuel.

“It proves the threshold of whining and evoking misery is much different from the threshold of changing behavior,” Kloza said.

Oil markets provided some better news.

The August futures contract for light sweet crude fell 48 cents on the New York Mercantile Exchange to $73.61 a barrel, continuing a decline from the record high of $75.19 set July 5.

But analysts warned that it wouldn’t take much to send gasoline and oil prices sharply higher. A hurricane near key oil and gasoline production facilities, problems at refineries or new unrest in oil-producing countries would do the trick, they said.

“We will see oil at $78 a barrel before we see anything below $70 a barrel,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago.