— Retail gas prices are spiking to levels last seen in the heat of summer driving season, raising fears that consumers could cut back on holiday spending.
But the crude rally propelling the jump at the pump hit the brakes Monday, as a barrel of oil tumbled more than 2 percent as the dollar strengthened after hitting a 14-month low.
The average price for a gallon of regular gasoline rose for the 13th straight day, adding sixth-tenths of a cent overnight to $2.671, according to auto club AAA, Wright Express and Oil Price Information Service.
That's still below what drivers were paying at this time last year, but the 20-cent, two-week jump could prompt consumers already dealing with a climbing unemployment rate, depreciating home prices and damaged 401k accounts to spend less over the holidays, said Ryan Sweet, a senior economist with Moody's Economy.com.
"If they're spending more money at the pump, they're going to be less willing to go out to the malls to spend frivolously," Sweet said.
NEW YORK — Oil prices climbed more than 5 percent, surpassing $70 a barrel Wednesday after a government report said the nation's gasoline supply dropped unexpectedly and demand increased from last year.
Benchmark crude for November delivery added $3.39 to $70.10 a barrel in late trading on the New York Mercantile Exchange. Brent crude rose $3.06 to $68.55 a barrel on the ICE Futures exchange in London.
The Energy Information Administration put U.S. gasoline stockpiles at 211.5 million barrels last week, a drop of 0.8 percent from the prior week. It also said demand for gasoline over the four weeks ended Sept. 25 was 5.4 percent higher than last year.
The price of oil, which is used to make gasoline, rose as investors placed some final bets on the last day of the quarter. Crude prices have waffled between $59 and $75 during the past three months, but equities markets surged during the quarter as investors became increasingly confident that the economy was healing.
Despite the drop last week, gasoline supplies are still considered to be well above normal. They're nearly 11 percent higher than they were last year, and much of last week's drop came as many U.S. refiners cut back on their operations.