Gasoline prices jump to record, oil pauses
Gasoline prices jumped nearly 3 cents to a new national record of nearly $3.65 a gallon on May 8, while oil prices paused from their own climb to record highs and succumbed to mild profit-taking.
The delivered price of Alaska North Slope crude hit $123.53 on May 7, a new record prompting Gov. Sarah Palin announce plans for a short-term energy fix for Alaska in the coming days.
At the pump, the average price of a gallon of regular gas nationwide rose 2.7 cents to a record $3.645, according to a survey of stations by AAA and the Oil Price Information Service. Diesel prices also rose, adding 0.9 cents to match a record national average of $4.251 a gallon.
Gas prices tend to lag oil futures, and with crude rising to a new record near $124 a barrel on May 7 and likely headed higher, it’s widely expected the average price of gas will soon rise as high as $4. Motorists in many areas, including parts of Alaska, California and Hawaii, are already paying that much, or more.
“If oil prices go the way that pundits are expecting, there’s no way we’ll stay under $4 a gallon,” said Fadel Gheit, an analyst at Oppenheimer & Co. in New York.
Analysts said there was little in the way of news driving the most recent oil moves. Investors occasionally sell a little during rallies to lock in profits, Gheit said. But bullish momentum — and expectations that the dollar will continue to weaken against foreign currencies including the euro — are likely to keep pushing oil to new records, he said.
Goldman Sachs analysts recently predicted prices will rise as high as $150 to $200 a barrel within two years. That forecast has driven much of oil’s gains in recent days.
— Associated Press and Petroleum News
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