California's drivers once again are spending more than $3 a gallon on average, the Energy Department said Monday, although analysts expect some relief from rising fuel prices after Labor Day.
The average retail price of a gallon of regular gasoline in California climbed 14.4 cents over the last week to a new high for the year of $3.040. That topped the old mark of $3.005 set June 22, according to the Energy Department's weekly survey of filling stations. It was only the second time in 2009 that California prices averaged above $3 a gallon after setting a record of $4.588 in June 2008.
Nationally, pump prices rose 9 cents to an average of $2.647, just 3.4 cents short of the high for the year.
This was despite a sharp increase in surplus crude oil being stored at sea off the U.S. coast, several analysts, including ICAP Shipping in London, have reported. ICAP Shipping tracks world tanker fleets.
The steep price increase in California, which is beset with budget problems and a feeble economic recovery, "probably feels like water torture," said Tom Kloza, chief oil analyst for the Oil Price Information Service in Wall, N.J.
Retail gasoline prices are catching up with the jump in oil prices since December to more than $70 a barrel from the mid-$30 neighborhood. On Monday, crude oil futures for September delivery fell 33 cents, or 0.5%, to settle at $70.60 a barrel on the New York Mercantile Exchange.
"But this is not like the apocalyptic price increase of last year," Kloza said. "There should be some relief in prices after Labor Day," for a while at least, he said.
Kloza predicted that gasoline prices would range from $2.35 to $2.75 a gallon for the remainder of the year nationally and from $2.75 to $3.15 a gallon in California.
Oil prices are being driven higher in part by a weak dollar, which makes oil cheaper for foreign buyers. But short-term investors seeking better returns are once again getting some blame.
"Last summer, it seemed like it was driven by market speculators and not by real people or by real demand. I have the feeling that is going on again right now," said Christopher Yoder of Pasadena, an information technology manager at Caltech.
Yoder likes to joke that his late-model Toyota Prius is the household's gas guzzler. (Yoder's wife, Sandy Kapteyn, drives an electric Toyota Rav4, he said.) When gasoline prices rise, Yoder and his wife feel it less than most couples.
"My wife isn't even aware of what the price of gasoline is," he quipped.
Even though he has to fill his tank only every few weeks, Yoder is still upset by rising gas prices: "It makes me kind of mad that none of that money is going to go into better public transportation or more fuel-efficient vehicles."