NEW YORK (AP) — Retail gas prices likely bottomed out last week, and they’re again headed to above $3 a gallon this summer, experts said Monday.
Although pump prices typically rise this time of year as refineries switch to a more expensive grade of gas, the increase likely will frustrate many motorists. Prices are climbing even after millions of Americans received pink slips and kept their cars in the driveway.
“If you look at demand, it’s just abysmal,” said Fred Rozell, retail pricing director at Oil Price Information Service.
What’s pushing prices higher isn’t American consumption. It’s the crude oil that’s used to make motor fuel, Rozell said. Crude is an international commodity that’s become ever more expensive as demand grows in China. As crude increases, so does gas.
On Monday, retail gas prices rose for the fifth straight day, adding less than a penny overnight to a new national average of $2.648 a gallon, according to AAA, Wright Express and Oil Price Information Service.
A gallon of regular unleaded is still cheaper than it was a month ago. It’s also 73.1 cents more expensive than the same time last year.
Rozell said motorists shouldn’t expect a return of the price spikes of 2008, when gasoline jumped above $4 a gallon in some parts of the country. Americans simply aren’t burning enough fuel to push prices that high.
“I’ll be surprised if it got over $3.25,” he said.
Gasoline futures also jumped Monday to the highest price in more than a month as investors looked ahead to the summer driving season. Prices also were propped up by a festering refinery strike in France, where workers angry about the uncertain future of a Total SA plant have shut down over half of the country’s refining capacity.
The standoff already has led to gasoline shortages in parts of the country, and it appears to be spreading. Refinery workers at Exxon Mobil Corp.-owned Esso France are expected to join the walk out Tuesday, and workers at British-owned chemical company INEOS also plan to strike.
The dispute could affect U.S. supplies as well, since America imports gasoline from Europe. Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, said it’s unlikely that U.S. gas stations would experience any shortages, but the country’s surplus may dip in coming weeks.
Benchmark oil for March delivery added 35 cents Monday to settle at $80.16 a barrel on the contract’s final day of trading on the New York Mercantile Exchange. Most of the trading volume already has shifted to the April contract, which added 25 cents to settle at $80.31 a barrel.
In other Nymex trading in March contracts, heating oil rose less than a penny to settle at $2.0788 a gallon, and gasoline gained 3.01 cents to settle at $2.1158 a gallon. Natural gas dropped 14.9 cents to settle at $4.895 per 1,000 cubic feet.
In London, Brent crude added 42 cents to settle at $78.61 on the ICE futures exchange.