Gas prices keep climbing even as oil prices drop
NEW YORK — The gasoline price record keeps getting broken with each passing day. AAA puts the national average for a gallon of regular at a record $3.95. It's jumped 35 cents in the past month and is 76-cents-a-gallon higher than a year ago.
If you need premium, it's also never been more expensive. The auto club says the national average for premium is $4.35. That's an 84-cent-a-gallon jump over last year.
Oil prices fell back Thursday ahead of a report expected to show U.S. inventories of crude and petroleum products grew last week.
Prices remained volatile, though, buffeted about by threats against Nigerian oil facilities, worries about falling gasoline demand in the U.S. and a strengthening U.S. dollar.
By midday in Europe, light, sweet crude contract for July delivery was down 65 cents at $130.38 a barrel in electronic trade on the New York Mercantile Exchange.
In London, July Brent crude fell 86 cents to $130.07 a barrel on the ICE Futures exchange.
The Nymex July contract dipped below $126 a barrel Wednesday in New York before recovering to finish at $131.03, up $2.18. At its low in the floor session, oil was more than $9 off the record high it hit last week above $135 a barrel.
"Fears that soaring oil prices could damage demand continue to weigh on sentiment," said a report from research firm JBC Energy in Vienna, Austria.
The reversal from the floor session's close came with a renewed strengthening of the dollar and ahead of the U.S. Energy Department's inventory report, to be released later Thursday.
In the last couple of days, the dollar has rebounded against both the euro and yen, receiving some support Wednesday when the U.S. Commerce Department said orders to American factories for big-ticket manufactured goods fell by a smaller-than-expected amount in April.
That was taken as a possible signal of a rebound in the slumping U.S. manufacturing sector and the dollar strengthened back above the 105 yen level, while the euro dropped below $1.56.
When the dollar declines, investors tend to buy commodities such as oil as a hedge against inflation. But a stronger dollar makes oil more expensive to investors dealing in other currencies, and the tendency usually reverses.
Also, a survey of analysts by Platts, the energy research arm of McGraw-Hill Cos., indicated that U.S. crude oil stocks were expected to have grown 750,000 barrels in the week ended May 23.
The Platts survey also indicated analysts were expecting a build in U.S. gasoline stock of 400,000 barrels, and a build in distillate stocks, which include heating oil and diesel fuel, of 800,000 barrels.
Prices were still being supported, though, by further threats against Nigerian oil facilities. Those threats led investors in the U.S. to at least temporarily set aside concerns about falling gasoline demand.
On Wednesday, the Nigerian rebel group The Movement for the Emancipation of the Niger Delta threatened new attacks on oil installations to mark the one-year anniversary of President Umaru Yar'Adua's inauguration. A weekend attack by the group on an oil facility cut about 130,000 barrels of the nation's oil production, according to Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut, in a research note.
News of disruptions in Nigeria, one of Africa's largest producers and a major U.S. supplier, have helped push oil prices higher over the past year.
That contended Wednesday with the growing belief that U.S. demand for gasoline is falling as the average retail pump prices approaches $4 a gallon ($1.05 per liter). That belief was supported by two new surveys showing Americans consuming less gasoline.
Demand for gasoline fell 5.5 percent last week compared to the same week last year, according to the weekly MasterCard SpendingPulse survey. The survey also found that, on average, demand over the past four weeks is off 6.3 percent compared to the same period last year.
A separate CreditCards.com survey of about 1,000 people found that more than half have cut back on their driving due to high fuel prices.
In other Nymex trading, heating oil futures fell 2.08 cents to $3.8035 a gallon while gasoline prices were down 1.31 cents to $3.4345 a gallon. Natural gas futures rose 1.9 cents to $12.014 per 1,000 cubic feet.
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AP Business Writer Thomas Hogue in Bangkok, Thailand, contributed to this report.
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May 29, 2008 07:57 AM EST |