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Pump Prices Near $3 A Gallon
Prices Nearly $1 Higher Than This Time Last Year
Mark Williams, AP Energy Writer
Posted: Sunday, January 10, 2010
Updated: 6:51 pm CST January 11, 2010
The average price of gasoline is heading back towards $3 per gallon nationwide, sapping strength from the economic recovery as consumers spend roughly half a billion dollars more on energy each day than they did a year ago.
For average motorists using about 50 gallons per month of gasoline, rising pump prices have added about $50 a month to their fuel bills. This comes as the worst cold spell in years drives up demand -- and prices -- for heating oil, natural gas and electricity.
The total daily fuel bill is probably $400 million to $550 million more than a year ago, says Tom Kloza of the Oil Price Information Service.
The jump in energy costs will likely force families to delay purchases of big-ticket items, such as cars and refrigerators, says James Hamilton, a professor of economics at the University of California San Diego, who has tracked the effect of gasoline prices on the economy.
Gas prices have tracked the strong oil market, where the cost for a barrel has spiked 20 percent in the past month on the New York Mercantile Exchange.
Oil prices are about three times higher than a year ago. Investors have seen increased demand in countries such as China and India and the dollar remains weak, encouraging investment in commodities. The price gains have come even though supplies are abundant.
Gas prices rose 1.4 cents overnight to $2.749 per gallon, according to auto club AAA, Wright Express and OPIS. Prices have climbed 8.4 cents a gallon in the past week and are 95.5 cents higher than a year ago.
"We are not there yet, but gasoline prices at more than $3 is certainly an unwelcome sign of consumer distress," says Peter Beutel of Cameron Hanover, an energy consultancy.
Pump prices have jumped 8 cents or more in the past week in many parts of the country, including Dallas, Chicago, Miami and Columbus, Ohio. And the per-gallon price is above $3 in some places, including California and New York.
Hamilton says he believes the higher prices will not hurt the economy enough to push it back into a recession.
Kloza says drivers aren't likely to pay $3 a gallon nationwide until spring.
Benchmark crude for February delivery fell 23 cents to settle at $82.52 a barrel on the Nymex Monday, despite signs of strong demand from China and a weak dollar.
China said Sunday that oil imports rose 14 percent last year to a record high in December, part of a 56 percent surge in overall imports last month.
In other Nymex trading in February contracts, heating oil fell less than a penny to $2.1924 a gallon while gasoline gained less than a cent to $2.1596 a gallon. Natural gas futures fell 27.4 cents to $5.475 per 1,000 cubic feet.
In London, Brent crude for February delivery fell 34 cents to $81.03 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.
Copyright 2010 by The Associated Press. All rights reserved.
Pump Prices Near $3 A Gallon
Prices Nearly $1 Higher Than This Time Last Year
Mark Williams, AP Energy Writer
Posted: Sunday, January 10, 2010
Updated: 6:51 pm CST January 11, 2010
The average price of gasoline is heading back towards $3 per gallon nationwide, sapping strength from the economic recovery as consumers spend roughly half a billion dollars more on energy each day than they did a year ago.
For average motorists using about 50 gallons per month of gasoline, rising pump prices have added about $50 a month to their fuel bills. This comes as the worst cold spell in years drives up demand -- and prices -- for heating oil, natural gas and electricity.
The total daily fuel bill is probably $400 million to $550 million more than a year ago, says Tom Kloza of the Oil Price Information Service.
The jump in energy costs will likely force families to delay purchases of big-ticket items, such as cars and refrigerators, says James Hamilton, a professor of economics at the University of California San Diego, who has tracked the effect of gasoline prices on the economy.
Gas prices have tracked the strong oil market, where the cost for a barrel has spiked 20 percent in the past month on the New York Mercantile Exchange.
Oil prices are about three times higher than a year ago. Investors have seen increased demand in countries such as China and India and the dollar remains weak, encouraging investment in commodities. The price gains have come even though supplies are abundant.
Gas prices rose 1.4 cents overnight to $2.749 per gallon, according to auto club AAA, Wright Express and OPIS. Prices have climbed 8.4 cents a gallon in the past week and are 95.5 cents higher than a year ago.
"We are not there yet, but gasoline prices at more than $3 is certainly an unwelcome sign of consumer distress," says Peter Beutel of Cameron Hanover, an energy consultancy.
Pump prices have jumped 8 cents or more in the past week in many parts of the country, including Dallas, Chicago, Miami and Columbus, Ohio. And the per-gallon price is above $3 in some places, including California and New York.
Hamilton says he believes the higher prices will not hurt the economy enough to push it back into a recession.
Kloza says drivers aren't likely to pay $3 a gallon nationwide until spring.
Benchmark crude for February delivery fell 23 cents to settle at $82.52 a barrel on the Nymex Monday, despite signs of strong demand from China and a weak dollar.
China said Sunday that oil imports rose 14 percent last year to a record high in December, part of a 56 percent surge in overall imports last month.
In other Nymex trading in February contracts, heating oil fell less than a penny to $2.1924 a gallon while gasoline gained less than a cent to $2.1596 a gallon. Natural gas futures fell 27.4 cents to $5.475 per 1,000 cubic feet.
In London, Brent crude for February delivery fell 34 cents to $81.03 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.
Copyright 2010 by The Associated Press. All rights reserved.