Gas price sets record at $3.357
NEW YORK - US retail gasoline prices extended their record run yesterday, adding to the pain consumers feel every time they fill up. Experts predict prices will rise even higher as the peak summer driving season approaches.
Meanwhile, crude oil futures fell as the dollar strengthened, giving investors an opportunity to collect profits from the previous session's record rise above $112.
At the pump, the national average price of a gallon of gas climbed 1.4 cents overnight to a record $3.357 a gallon, according to AAA and the Oil Price Information Service.
Prices have set a string of records in recent weeks and are 56 cents higher than a year ago.
Retail diesel, the fuel of trucks, trains, and ships, rose overnight to a national record of $4.045 a gallon.
The Energy Department expects gasoline prices to average as much as $3.60 a gallon this summer, but believes the national average price could spike as high as $4 a gallon at times.
"Gas hitting $3.60, $3.65 a gallon seems like a done deal," said James Cordier, president of the Tampa, Fla., trading firms Liberty Trading Group and OptionSellers.com.
Gasoline prices are rising, in part, because of a supply crunch that occurs every spring when refiners switch over from making winter grade gasoline to the less polluting fuel they're required to sell during the summer. Summer grade gasoline is more expensive to make.
Also, refiners try to sell off all of their winter grade fuel before the switch, which drops supplies to very low levels.
This year, the spring price spike is being exacerbated by two unusual factors: tight supplies of key gasoline blending components and record oil prices. Analysts say alkylate, an ingredient critical to the manufacture of summer grade gasoline, is in short supply and will push prices higher.
Meanwhile, crude oil, the main ingredient in gasoline, fell yesterday, but remained close to record levels.
Light, sweet crude for May delivery dropped 76 cents to settle at $110.11 a barrel on the New York Mercantile Exchange.
The dollar strengthened against the euro, giving some investors an opportunity to take profits.
Crude prices rose to a trading record of $112.21 on Wednesday after the Energy Department said supplies fell unexpectedly last week.