Gas price run-up takes respite
Retail fuel prices may have run out of gas.
The U.S. average cost of gasoline was virtually unchanged during the week ended Monday, the Energy Department said. California’s average also was little changed.
But fuel experts were unsure whether drivers were seeing only a brief respite or the long-awaited signal that relief was on the way.
Nationwide, the average price for self-serve regular was $3.965 a gallon, up two-tenths of a penny. In California, the average was $4.254, down three-tenths of a penny.
“California prices are on the way down. Nationally you might see a dead-cat bounce in prices this week because of fears that flooding could inundate some southern refineries,” said Tom Kloza, chief oil analyst for the Oil Price Information Service. “But it would take a flood of biblical proportions to take the national average past $4 a gallon.”
Kloza was referring to flooding along the Mississippi River, which is causing concerns that the river could inundate some of the nation’s biggest refineries later this week.
Bob van der Valk, a fuel price analyst who had been saying that California prices might reach $5 a gallon, sharply revised his prediction Monday as gasoline demand across the U.S. showed signs, he said, of shifting to a long-term decline.
“The Memorial and Canada Day weekend travelers will have a pleasant surprise waiting for them when they fill up their gas tanks,” Van der Valk said. “California gasoline prices should be back down below $4 per gallon, with the rest of the country down by about 25 cents per gallon from the highs reached last week.”
Some analysts cited last week’s steep 15% drop in oil prices as the biggest factor influencing retail gasoline, but the oil market’s rebound Monday had other analysts hedging their bets and suggesting that the pain at the pump may not be over soon.
On the New York Mercantile Exchange, West Texas Intermediate crude rose $5.37, or 5.5%, to close at $102.55 a barrel. In London, Brent crude jumped $6.77 to $115.90 a barrel.
“I doubt that it’s all over with the potential flooding heading toward those refineries. And the problems in the Middle East are still with us,” said John Kilduff of Again Capital in New York. “We’re not out of the woods yet.”
Jacob Gold, president of the Jacob Gold & Associates wealth management firm, said spring’s wild weather, with flooding and severe tornadoes, doesn’t bode well for the upcoming hurricane season. “The wild card going forward would be a disruptive hurricane that can interrupt refining operations in the Gulf of Mexico,” Gold said.
Meanwhile, a diverse group representing several often conflicting opinions about America’s energy future said Monday that they weren’t ready to wait to see how prices react in the coming weeks. The group wrote a letter to President Obama urging immediate action on a number of energy-related fronts, particularly in raising the fuel efficiency of U.S. vehicles.
“You have a historic opportunity to do more than any previous president to ensure that we can create a future that frees America from its dangerous dependence on oil, keeps billions of dollars in our economy and reduces the threat of climate change. We urge you to seize this opportunity by setting strong vehicle standards that increase fuel efficiency to 60 miles per gallon and reduce global warming pollution 6% annually by 2025,” the letter said.
The letter was signed by leaders representing several groups, including Alaska Wilderness League, Center for Auto Safety, Center for Energy Efficiency and Renewable Technologies, Citizens Campaign for the Environment, Clean Air Council, Coalition for Clean Air, Environmental Defense Fund, Natural Resources Defense Council, Republicans for Environmental Protection and Union of Concerned Scientists.
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