Gas hits 4-month high of $1.99 per gallon
U.S. average retail gasoline prices are again approaching $2 a gallon, reaching a four-month high amid record high crude oil prices and the effects of Hurricane Ivan, a leading industry analyst said on Sunday.
The national average price for self-serve regular unleaded gasoline was $1.989 per gallon in the two weeks ended Oct. 8, up 7.8 cents from Sept. 24, and up 13.2 cents in the last month, according to the twice-a-month Lundberg survey of about 7,000 U.S. gas stations.
Pump prices are now the highest since June 11, and less than 9 cents below the $2.074 peak set on May 21. They might have more room to rise, according to survey editor Trilby Lundberg.
"The main cause of the latest price increase was Hurricane Ivan, which has been affecting U.S. Gulf of Mexico offshore oil production," Lundberg said in an interview. "There is upward pressure on future gasoline prices because crude oil prices have been rising faster than pump prices."
Oil prices have climbed more than 22 percent since Hurricane Ivan began disrupting Gulf of Mexico supplies in mid-September. Recent bad weather in the region has contributed to the increase, Lundberg said.
Crude oil futures for November delivery on the New York Mercantile Exchange settled Friday at $53.31 a barrel. Earlier in the day, the November crude contract soared to a record of $53.40 -- the highest price since NYMEX started trading crude oil futures in 1983.
U.S. Treasury Secretary John Snow on Sunday called the record prices a "drag" that creates "headwinds" for the U.S. economy and takes disposable income away from consumers. He spoke on CNN's "Late Edition."
Lundberg, based in Camarillo, California, said higher oil prices do weigh on the economy, "but only compared with what lower prices would do. Demand for petroleum products continues to grow even at these prices, suggesting that prices are not alarmingly high."
In the latest survey, the highest average pump price was $2.35 per gallon in San Diego, while the lowest average was $1.84 per gallon in Houston.