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Pump prices finally rise with oil costs

While crude oil prices have increased nearly 39 percent since August, gasoline prices have only begun to rise in the last few weeks. While crude oil prices have increased nearly 39 percent since August, gasoline prices have only begun to rise in the last few weeks. (JIM BOURG/REUTERS)
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Associated Press / November 6, 2007

NEW YORK - Gasoline prices jumped back above $3 a gallon at the pump yesterday even as concerns about the economy and increases in crude supplies sent oil prices lower.

Retail gas prices have been slow to catch up with soaring crude prices, which have gained nearly 39 percent since late August to a trading high of $96.24 on Thursday. Gas prices only started rising steadily in mid-October.

The national average price of a gallon of gas rose 1.5 cents overnight to $3.004, and has jumped almost 25 cents in three weeks, according to AAA and the Oil Price Information Service.

The sharp jump in gas prices could continue if oil keeps surging to new heights.

"The consumer has been relatively isolated from these prices," said Amanda Kurzendoerfer, commodities analyst at Summit Energy Services Inc. in Louisville, Ky. But, she said, if oil prices don't retreat, gas prices could reach $3.50 or $4 a gallon by next summer.

Crude, meanwhile, closed lower after an erratic session that saw prices change direction several times.

Energy investors worry that a slowdown in the economy would curb demand for oil and petroleum products.

Light, sweet crude for December delivery fell $1.95 to settle at $93.98 a barrel on the New York Mercantile Exchange yesterday.

Earlier yesterday, oil futures rose above $96 a barrel after the Institute for Supply Management reported that the economy's services sector grew at a faster-than-expected rate in October. But broader concerns about the mortgage industry's impact on the economy reasserted themselves on equity and energy markets as the day wore on.

Other energy futures also fell. The contract for December gasoline fell 5.84 cents to settle at $2.3811 a gallon on the Nymex, while December heating oil fell 2.98 cents to settle at $2.5439 a gallon.

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