Gas prices at the pump surged to a new record Monday even as crude oil accelerated its slide amid a broad-based commodities sell-off.
The average price for a gallon of regular unleaded rose to $3.287, according to AAA and the Oil Price Information Service. Prices were highest in Hawaii and California, where the average price topped $3.60 a gallon.
Gasoline prices are expected to keep rising as the summer driving season brings with it greater demand for the fuel. Last year, prices peaked in May before backtracking; with gasoline already at a record it will likely only continue its advance.
If crude oil prices, which set records of their own during March, continue their advance, that will also add to the cost of gasoline at the pump.
On Monday, however, light, sweet crude for May delivery dropped $4.04 to settle at $101.58 a barrel on the New York Mercantile Exchange, adding to a decline of nearly $2 a barrel on Friday. Even so, prices finished the first three months of the year 5.8 percent higher than where they started; crude set a record of $111.80 in March before giving up ground.
Natural gas, on the other hand, jumped 30.1 cents to settle at $10.101 per 1,000 cubic feet on the Nymex.
Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill., attributed the gain to cold weather earlier in the year. Supplies of the heating, cooking and power-generation fuel typically increase at this time of year as warmer springtime temperatures slow demand.
“That process is going to be delayed this year due to the cold weather,” he said. “We’ve virtually erased a huge supply surplus that existed at the beginning of winter.”
Analysts are split on oil’s direction. Many think prices will rise to new records in coming months as the dollar weakens further, but others say such high prices can’t be sustained.
“We have huge speculative positions in oil,” said Flynn, who believes prices are likely to move lower. “Some may call it a bubble, some may just call it overbought.”