Oil and gas prices rise along with optimism about global economy
Solid manufacturing data at home and abroad sent U.S. markets soaring Monday, boosting hopes that that global economy is picking up steam. But some motorists won’t be happy with the result.
Crude oil leapfrogged its 2009 peak, rising $2.15 a barrel to close at $81.51. That’s its highest level since October 2008.
Pump prices for gasoline are sure to follow, analysts said.
Some experts were predicting California gas prices in the $3.15-a-gallon range or higher and a national average of $2.75 a gallon in the coming weeks.
Retail gasoline prices are already on the rise at the start of a month in which they usually drop as Americans return from holiday road trips.
In California, the average price of a gallon of regular gasoline rose 5.4 cents over the last week to $2.987, according to the Energy Department’s weekly survey of U.S. filling stations.
Nationally, the average rose 5.8 cents to $2.665 a gallon. That’s nearly a dollar more than U.S. motorists were paying on average during the same period in 2009.
In California, it cost about $20 more to fill an 18-gallon tank Monday than it did a year ago, when gas averaged $1.874 a gallon.
“Stocks are up, and a lot of money is flowing into equities and commodities like oil based on the good economic news,” said Tom Kloza, senior oil analyst for the Oil Price Information Service in New Jersey. He was citing reports by the Princeton, N.J.-based Economic Outlook Group and by the Institute for Supply Management that predicted strong growth and reduced unemployment in 2010.
“Our forecast has the private economy gaining enough momentum during the year to finally stand on its own by year end,” the Economic Outlook Group’s report said.
But the rise in energy prices that may be sparked by that growth could also put a damper on consumer confidence if Americans are forced to spend more money fueling their vehicles and heating their homes, Kloza said. He added that the hit on people’s wallets was already a lot harder than it was last January.
“At this time last year, Americans were spending about $600 million a day on gasoline. We’re already back to spending $1 billion a day now,” Kloza said.
