Gasoline prices edge up in state
Gasoline prices fell less than a penny around the nation last week, the Energy Department said Monday, but that still broke 11 straight weeks of increases.
In California, the nation’s highest average retail price grew 1.1 cents to $3.316 a gallon, but the slight rise lent weight to the belief that the worst might be over and that prices could decline a bit this summer.
The numbers might quiet a rising chorus of analysts who say $4 a gallon is possible this summer if tight fuel supplies and high driver demand combine with some sort of significant disruption, perhaps from a hurricane.
One leading market watcher said everything that could go wrong in the near term had already been factored into prices.
“I’m sticking to my story. We’re close to the likely top of prices, and all of the talk about $4 a gallon is just talk -- provocative perhaps but not accurate,” said Tom Kloza of Oil Price Information Service in Wall, N.J.
That would be welcome relief to motorists in California, where the lowest per-gallon price reported Monday on GasBuddy .com was $3.05 at an Arco station in Roseville. At the other extreme, a station in Crescent City was selling self-serve regular for $3.79.
In all, the Energy Department said, the California average was 24.8 cents higher than a year earlier.
It was a different story across the country as refineries that had been shut for maintenance began to go back on line, leading the average price down 0.7 of a cent to $2.869. Nationally, prices were running 4.5 cents below those of a year earlier.
Despite the upbeat price news, those who predict that pump prices have not peaked can point to Monday’s surge in oil, as crude futures for June delivery rose $1.78 to $65.89 a barrel in New York. Analysts cited several factors, notably the continued strife in oil-rich regions of Nigeria.
“We are one problem away from hitting $4-a-gallon gasoline. Even without problems, I think we are going to record highs this year,” said Phil Flynn, vice president and senior market analyst at Alaron Trading Corp. in Chicago.
Still, said economist Christopher Knittel of UC Davis, who studies fuel consumption, many motorists might shrug off higher prices because they had already curtailed their driving to essential trips.
Knittel’s remarks were based on a study presented at the UC Energy Institute in Berkeley in December that compared the responses to high gas prices of 1970s-era drivers and current motorists. Current drivers are more likely to be in families in which both parents work and commute. They live farther away from their jobs, and they have less access to public transportation.
“Everyone looks for a magical threshold,” Knittel said. “Now, $4 is the new $3. We used to say that consumers would react if gas prices hit $3 and they didn’t react. They might not react to $4.”
