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23 May 2024

Gasoline prices jump to highest level since June

By Agencies

Gasoline prices jumped on Friday to their highest level since June, a possible preview of what many analysts believe will be a record spike in US pump prices this spring.


But the current price surge could be short-lived. While gas prices have risen sharply in recent days in response to oil’s dramatic climb to a new record above $101 (Dh370.67) a barrel, gasoline supplies have quietly grown to their highest level in 14 years.


“We’ve got a major supply cushion,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois.


At the pump, gas prices rose 2.9 cents overnight to a national average of $3.115 a gallon (82 cents a liter), according to AAA and the Oil Price Information Service. That was the highest since June 8.


At the same time, March gasoline futures fell 0.86 cent to $2.5134 a gallon on the New York Mercantile Exchange on the view that stocks are growing while demand is weakening. Oil futures fluctuated as some traders sold in response to growing supplies and others bought on concerns about potential supply disruptions.


Meanwhile, light, sweet crude for April delivery rose 49 cents to $98.72 a barrel but alternated between gains and losses.


Many analysts believe gas prices will rise this spring to new records near $3.75 or $4 a gallon. But not everyone agrees.


Ritterbusch, for example, thinks the high level of supplies, and an eventual decline in oil prices, will pull pump prices down. He doubts prices will rise as high as $3.75 a gallon (99 cents a liter) without a major overseas supply disruption or domestic refinery outage.


Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, New Jersey, argues that while gasoline prices won’t rise as much this spring as they have in previous years, they are starting from a much higher level. Indeed, prices at the moment are 83 cents higher than a year ago.


The Energy Department’s latest forecast calls for retail gas prices to peak near $3.40 a gallon (90 cents a liter) this spring.


While pressured at times by growing supplies, oil prices were supported Friday by word Turkish troops pursued separatist Kurdish rebels into northern Iraq. Concerns that the Kurds would retaliate against Turkish attacks last fall by sabotaging oil shipments out of Iraq had much to do with oil’s rise to $100, analysts said.


Word that the key Houston Shipping Channel was closed to oil tankers and other ships for the second day in a row also gave oil traders reason to buy.


Other energy futures rose Friday. March heating oil futures jumped 3.59 cents to $2.774 a gallon on the Nymex and March natural gas futures rose 12 cents to $9.011 per 1,000 cubic feet. Both contracts were being pushed higher by the winter storm pounding the Northeast.


In London, April Brent crude futures rose 87 cents to $97.11 a barrel on the ICE Futures exchange.  (AP)