Gasoline prices remain at record highs for this time of year
Retail gasoline prices remained at record high levels for this time of year, but at least the oil rally finally cooled Monday, ending six straight weeks of gains for the commodity.
Any slowdown in crude oil inflation is welcome news to American consumers, who are poised to pay a record $489.7 billion on gasoline this year by the calculation of Tom Kloza, chief oil analyst for the Oil Price Information Service. That’s more than $100 billion above what they paid in 2010.
U.S. drivers were paying an average $3.436 for a gallon of self-serve regular gasoline, according to the Energy Department’s weekly survey of service stations. The U.S. average is up 1.2 cents from a week earlier and 54.4 cents from a year earlier. The old record for this time of year was $3.111 a gallon, set in 2007.
In California, the average price for a gallon of regular gasoline was $3.84, down 1.5 cents from a week earlier but up 66.5 cents from this time last year. The old high mark for this week, $3.395 a gallon, also was set in 2007.
Gasoline prices remain high in part because some of the nation’s refiners are making more diesel and heating oil at this time of year and exporting record amounts of diesel overseas, where they can make more profit.
Kloza said demand for gasoline in the U.S. is so low that some refiners who aren’t selling overseas are shutting down production.
“On the eastern half of the country, we’ve already seen ConocoPhillips shut down a refinery and Sunoco may be ready to shut down another,” Kloza said. “This is also going to set the stage for a big rally in gasoline prices in the spring of 2012.”
High gasoline and diesel prices helped drive the results of a Greenberg Quinlan Rosner Research poll, conducted for the Small Business Majority advocacy group, that showed 80% of small-business owners in California were in favor of tougher fuel-efficiency standards.
“Stronger fuel-efficiency standards would help decrease costs associated with transport, which would boost our bottom line,” Zachary Davis, owner of the Penny Ice Creamery in Santa Cruz, said in the group’s statement, released Monday. “That’s money we could put back into running and growing our business.”
In futures trading, oil ended its longest rally in more than two years as concerns over the European debt crisis outweighed the fact that Japan posted its first economic growth since its disastrous earthquake and tsunami in March.
Analysts said the rally was driven by increased demand in emerging economies and because North Africa’s biggest oil producer, Libya, remains largely offline since its recently ended civil war.
Crude oil for December delivery dropped 85 cents to $98.14 a barrel in trading on the New York Mercantile Exchange on Monday. Brent oil was down $2.27 to $111.89 a barrel on the London-based ICE Futures Exchange.
Oil prices had rallied strongly — up more than 30% — since early October, when the commodity fell to its 2011 low of $74.95 a barrel on the New York Mercantile Exchange. That was the same time that the European benchmark, Brent North Sea crude, fell below $100 a barrel.
