Tags: Oil Prices

Higher Gasoline-Pump Prices May Linger Into 2011

Monday, 20 Dec 2010 02:22 PM

Those stubbornly high gas pump prices might seem like an unwelcome house guest who overstays his welcome, come January.

Drivers in many states already pay at least $3 a gallon for regular and analysts don't expect any relief soon. That's because crude oil has hovered between $83 and $89 a barrel since Thanksgiving.

The national average for regular gasoline was $2.981 a gallon Monday, according to a survey by AAA, Wright Express and the Oil Price Information Service. That's about the same as a week ago and more than a dime higher than a month ago. A year ago the average was $2.59 a gallon.

Motorists in Washington, California, Hawaii, Illinois and Maine are among those paying the highest prices — from $3.092 a gallon to $3.618 a gallon. The Rockies, Texas and parts of the Midwest have the cheapest gas, ranging from $2.738 a gallon to $2.827 a gallon.

A new study from business management firm PortiaGroup with data supplied by OPIS finds the average U.S. household will spend about $305 on gasoline this December, up almost 14 percent from last December and 76 percent more than December 2008. Gasoline is taking a bigger bite of median household income this year: 7.4 percent, compared with 6.5 percent last year and 4.2 percent two years ago, the study says.

Energy analyst Jim Ritterbusch believes the national average for a gallon of regular will range between $2.90 a gallon and $3.07 a gallon through February.

"We're going to see comparatively high prices here for a while," he said. "We've seen a stronger-than-expected economy and that tends to augur toward stronger gasoline prices, unfortunately, despite the fact that unemployment is still high."

Tom Kloza, publisher and chief oil analyst at OPIS, expects prices to fall during the winter and then begin to climb again. He has forecast prices between $3.25 and $3.75 a gallon from March to May, barring an unforeseen global economic issue. Pump prices could rise above $4 a gallon again in some states for the peak driving season, if oil prices continue to climb.

And oil prices climbed again on Monday, as China's thirst for energy showed little sign of being quenched. Platts, the energy information arm of McGraw-Gill, said China's oil demand in November hit an all-time high of 9.3 million barrels per day.

Traders also are monitoring the stock markets for clues about where the global economy may be headed in the New Year. Stocks were mixed at midday Monday after President Obama on Friday signed a bill extending tax cuts and unemployment benefits. The Standard & Poor's 500 was slightly higher, while the NASDAQ was a little lower and the Dow Jones Industrial Average lost about 30 points.

Benchmark oil for January delivery rose 35 cents to $88.37 a barrel on the New York Mercantile Exchange. Since the contract was expiring Monday, many traders shifted their focus to the February contract, where the price down 10 cents at $88.50 a barrel.

In other Nymex trading in January contracts, heating oil lost 0.02 cent at $2.4735 a gallon, gasoline futures added 4.12 cents at $2.3590 a gallon and natural gas gained 6.3 cents at $4.129 per 1,000 cubic feet.

In London, Brent crude rose 42 cents to $92.09 a barrel on the ICE Futures exchange.

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Those stubbornly high gas pump prices might seem like an unwelcome house guest who overstays his welcome, come January.Drivers in many states already pay at least $3 a gallon for regular and analysts don't expect any relief soon. That's because crude oil has hovered between...
Oil Prices
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2010-22-20
Monday, 20 Dec 2010 02:22 PM
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