Fuel prices stall, but lull may not last
Pump prices held steady over the last week, the Energy Department said Tuesday, up slightly in California and down slightly nationally as the busy holiday season gave way to one of the lightest driving months of the year.
But analysts warned that the January doldrums, which are also being influenced by unseasonably mild temperatures, wouldn’t last. They predicted sharp increases in gasoline prices across the nation.
Tom Kloza, chief oil analyst for Oil Price Information Service in Wall, N.J., likened January to a horse race on a muddy track: “It’s hard to find any traction, but there will be a point where the market will behave like a thoroughbred and the West Coast will be out in front.”
Out of the starting gates, however, the average price of a gallon of self-serve regular in California was $2.61 on Monday, up 0.3 cent from the previous Monday, according to the Energy Department’s weekly survey of service stations. That was 39.7 cents higher than the same week a year ago.
Nationally, the average price slipped 0.7 cent to $2.334 a gallon, 9.6 cents above the year-earlier price. The survey of more than 800 gasoline stations was released a day late because of the New Year’s holiday.
Kloza said fuel prices were expected to jump because of strong driver demand and more-extensive-than-usual refinery maintenance.
The New York Mercantile Exchange closed its trading floor Tuesday as the nation paid tribute to former President Ford. In electronic trading, crude declined as much as 64 cents to $60.41 a barrel but rebounded as mild temperatures dominated; the exchange maintained the official settlement price at Dec. 29’s closing of $61.05 a barrel.
Analysts said the markets also were influenced by the eleventh-hour signing of a natural gas contract between Russia and Belarus.
The dispute had threatened Russian gas supplies to the former Soviet Republic as well as the flow of gas through Belarus from Russia to Western Europe.
But analysts said prices could be roiled by further violence against oil industry workers in Nigeria, disputes with Iran over its nuclear enrichment program or other bad news.
“We are waiting for the next news story to emerge to drive the market higher,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago.
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