Oil prices fall but gasoline nears record for the end of a year
Oil prices fell from a two-year high Monday, but pump prices were on a course of their own, rising near year-end record highs.
Oil was weighed down by China’s second interest-rate hike since October. That raised fears that the manufacturing giant’s economic growth will slow as the country tries to rein in inflation. China is the world’s No. 2 oil consumer behind the U.S.
Crude oil futures for February delivery dropped 51 cents, or 0.6%, to close at $91 a barrel on the New York Mercantile Exchange. Futures had climbed to $91.88 a barrel earlier in the trading session, the highest level since Oct. 7, 2008.
High oil costs helped boost California’s average retail price for a gallon of gasoline by 4 cents to $3.287 a gallon compared with the previous Monday, according to the Energy Department’s weekly survey of filling stations around the U.S.
Nationally, the average was up 7 cents to $3.052 a gallon.
A year earlier, California’s average price was 35.4 cents lower; the U.S. average was 44.5 cents lower
“We will end the year with the highest prices ever for this week,” said Tom Kloza, chief oil analyst for the Oil Price Information Service, an energy information firm. “Then we will get a bit of a break, but between March and May, we will see gasoline prices at $3.25 a gallon to $3.75 a gallon nationally, with California at the highest end of that range.”
Year-end retail gasoline prices were last this high in 2007, when the national average was $3.053 on Dec. 31. By July 7, 2008, the national average had soared to a record $4.114 a gallon.
California’s average was $3.298 a gallon on Dec. 31, 2007. It climbed to a record $4.588 by the following June.
Kloza isn’t expecting a repeat of 2008.
“In 2008, we lost our collective heads, from Wall Street to Main Street. That will not happen again. Well, I hope not,” he quipped.