Gas Prices May Have Peaked After 48-Day Runup
Gas prices rose Monday for the 48th straight day, matching a record going back to at least the 1970s, with prices now up nearly two-thirds since the beginning of the year even as demand from motorists remains weak.
Yet the oil prices that influence what you pay at the pump are taking a breather from a three-month rally, with benchmark crude for July delivery falling nearly 3 percent, or $2.07 to $69.97 a barrel on the New York Mercantile Exchange. On Friday, it fell 64 cents to settle at $72.04.
The good news is that prices may be peaking in next couple of days. Wholesale gasoline prices in the Chicago area, which serves the upper Great Lakes, have fallen about 30 cents a gallon from just 10 days ago, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. Gas prices in the region have been more expensive than much of the rest of the country.
Just how much the ebb and flow of capital into commodity markets has come to affect prices for consumers might be found in what happened to natural gas prices Monday, a day in which the latest manufacturing report was mixed at best.
Natural gas futures soared more than 8 percent, possibly as money shifted from crude futures to natural gas. Spiking natural gas prices would be a concern for everyone, from heavy industries that use it to power factories, to consumers who use it to heat their homes.
The main index from New York Federal Reserve’s Empire State Manufacturing Survey fell 5 points in June to a negative 9.4. Still, forward-looking indexes rose, meaning conditions should improve during the next six months.
Crude’s upward track for most of the year has been mirrored by the declining value of the dollar. That’s because crude futures are bought and sold in U.S. currency. Crude gets cheaper for many buyers as the dollar falls.
That has brought a lot of money into the market in recent months, yet as could be expected with the dollar gaining strength for a second straight day Monday, crude prices are falling.
So was the Dow Jones industrial average, tumbling 200 points to start the week.
Prices at the pump rose 0.6 cents to $2.669 a gallon, according to auto club AAA, Wright Express and Oil Price Information Services. Prices are a nickel above where they were a week ago and 30.8 cents above month-ago levels, but remain $1.408 below year ago levels.
Consumers are now paying about $1 billion a day for gasoline compared with about $600 million a day over New Year’s weekend and $1.5 billion a day or more a year ago, according to Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
The more than 60 percent increase in prices so far this year, Kloza said. Gas prices also rose 48 straight days in 2007.
In other Nymex trading, gasoline for July delivery fell 2.9 cents to $2.0142 a gallon and heating oil fell 3.9 cents to $1.7986. Natural gas for July delivery rose 33.5 cents to $4.192 per 1,000 cubic feet.
In London, Brent prices fell $1.60 to $69.32 a barrel on the ICE Futures exchange.
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Associated Press writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.
6/15/2009 12:53 PM MARK WILLIAMS AP Energy Writer COLUMBUS, Ohio