June 29, 2010 in City

Gas prices start seasonal climb

Lower demand, ample supply should keep regular below $3
Sandy Shore Associated Press
 

Gasoline prices continued to rise Monday as vacationers in RVs and campers join commuters on the roads during the peak summer driving season.

Pump prices likely will increase over the next couple of weeks but fall short of $3 per gallon in most states. Analysts note that demand remains lackluster while supplies are ample. And consumers worried about the economy may keep traveling to a minimum.

The national average for retail gasoline prices rose 0.1 cent to $2.756 a gallon Monday, according to Wright Express and Oil Price Information Service. That’s an increase of 11.3 cents from a year ago.

The government’s Energy Information Administration said the national average price for a gallon of unleaded regular rose 1.4 cents last week to $2.757 per gallon. California drivers paid the highest price, an average of $3.126 per gallon. Regionally, prices were lowest along the Gulf coast, averaging about $2.613 per gallon.

Gas is averaging $3.143 per gallon in Los Angeles; $2.921 in Chicago; and $2.962 in Seattle. It’s a more affordable $2.765 per gallon in Cleveland and $2.693 in Boston.

Oil prices fell slightly after it appeared Tropical Storm Alex would strengthen but stay out of the Gulf region where most oil rigs and refineries are located, and where BP continues to try to stop a massive oil leak.

“The crude market is not particularly tight right now, so weather-related production outages will not have the same effect as in years past unless they reach Katrina levels,” MF Global analyst Mike Fitzpatrick said in a research note.

“Prices will, however, be sensitive to economic data flow, particularly with respect to the economy,” he wrote.

Benchmark crude for July delivery fell 61 cents to settle at $78.25 a barrel on the New York Mercantile Exchange.

Oil analyst and trader Stephen Schork predicted oil prices would trade in a narrow range this week ahead of the Fourth of July holiday.

The dollar also grew stronger against other global currencies, which can hurt commodities trading. Most commodities are priced in dollars so a stronger dollar makes them less appealing to foreign investors.

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