NEW YORK -- Gasoline futures prices edged higher yesterday on continuing supply concerns while oil prices extended their declines after the US government said it would suspend oil purchases for the Strategic Petroleum Reserve.
June gasoline futures wobbled between gains and losses before rising 1.5 cents to settle at $2.2476 a gallon on the New York Mercantile Exchange.
Meanwhile, prices at the gas pump are flirting with $3. The national average retail price of a gallon of gasoline rose 1.4 cents to $2.991 yesterday, according to AAA, reflecting the recent advance in the futures market.
Analysts think the market for gasoline is likely to remain tight and that prices will therefore stay high. Many analysts are concerned gasoline supplies won't be adequate to meet peak demand during the summer driving season, which begins Memorial Day weekend.
And that means prices will likely continue rising until gasoline inventories increase.
"The market is fundamentally bullish," said Jack Hunter, an energy trader at FC Stone Group, in Kansas City, Mo. "I definitely think this market is still spooked by gasoline supplies."
Light, sweet crude for June delivery fell 49 cents to settle at $63.19 a barrel on the Nymex after falling 72 cents Wednesday.
Heating oil futures fell less than a penny to settle at $1.8453 a gallon, while natural gas prices gained 21.7 cents to settle $7.947 per 1,000 cubic feet.
Hunter said the spring rally in oil and gasoline prices was largely due to the Department of Energy's plan, disclosed in January, to buy up to 129,033 barrels of crude oil a day. Yesterday, the department rejected bids for the purchase of up to 4 million barrels of crude as too high, and said it will suspend all purchases of oil for the reserve until at least after the summer driving season.