Gas prices going up

Published 12:00 am Sunday, May 20, 2007

Staff report

A survey of gasoline prices around the Dallas County area show that locally the cost of regular is in line with the national average.

Gasoline prices set more records at the pump Friday, while gasoline and oil futures prices turned mixed after the previous session’s big advance, the Associated Press reported.

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Retail gasoline prices rose 1.5 cents overnight to a national average price of $3.129 per gallon, a new high, and have risen 26 cents in the last month, according to AAA and the Oil Price Information Service.

Analysts blame strong consumer demand and a spate of unexpected refinery outages for the high prices, and say it could be mid-summer before they ease.

Locally, prices are on line with the national average. A random check of stations showed that Mr. Roy’s on Dallas Avenue was selling regular gas at $3.12 a gallon on Sunday.

Junction Amoco was also selling regular grade at $3.12 a gallon.

The price for regular gas at Broad Street Chevron was $3.19 a gallon, higher than the national average.

The lowest price was found at Petro Food & Gas on U.S. Highway 80 East was selling regular gas at $3.02 a gallon.

AP reported that gasoline futures for June delivery fell 2.89 cents to settle at $2.4077 a gallon on the New York Mercantile Exchange, with analysts attributing the decline to profit-taking from Thursday’s 9.96-cent increase in the June contract.

“I think yesterday’s run-up was just so enormous (that) this is just kind of a breather,” said Kevin Saville, an energy analyst at Platts.

Oil futures were up on continued concerns about gasoline supplies, rising 8 cents to settle at $64.94 on the Nymex. The contract jumped $2.31 on Thursday.

Heating oil for June dropped 2.15 cents to settle at $1.9152 a gallon on the Nymex while natural gas fell 13.1 cents to settle at $7.944 per 1,000 cubic feet.

Brent crude for July delivery lost 85 cents to settle at $69.42 a barrel on the ICE Futures exchange in London.

Traders and analysts are concerned that gasoline supplies are not catching up to demand with the summer driving season right around the corner. The Energy Information Administration reported Wednesday that gasoline stocks, while increasing to 195.2 million barrels last week, remained well below the average for this time of year.

Those worries have been exacerbated in recent days by a string of new problems at refineries.

“It seems that every day there are announcements of refinery glitches in the U.S., and this rash of refinery snags is driving the crude futures market,” said Victor Shum, energy analyst with Purvin & Gertz in Singapore.

Murphy Oil Corp. said its 125,000-barrel-a-day Meraux, La., refinery has shut down a crude unit for minor repairs, Dow Jones Newswires reported. Shutdowns at a number of U.S. refineries were also reported by BP PLC, ConocoPhillips and Valero Energy Corp., analysts said.

Many analysts think the refinery problems are an abnormality.

“What we’ve witnessed in the last two months is a little bit of a random cluster,” said Tom Kloza, an oil analyst at the Oil Price Information Service.

“We think inventories will start to rebuild as (refinery) outages unwind and demand growth remains below average,” wrote Bernstein Research analyst Neil McMahon in a Friday research note. “This will take time though, and prices will likely be supported until July.”

Oil prices also got a boost on Friday from the political situation in Nigeria, a major source of light, sweet crude.

Nigerian labor leaders on Thursday called a two-day strike on May 28 to protest last month’s elections. The strike is scheduled to coincide with the inauguration of a new government. The unions argue that the April elections which gave a sweeping victory to President-elect Umaru Yar’Adua and the ruling People’s Democratic Party were fraudulent and unacceptable.

Associated Press Writers John Wilen, Pablo Gorondi, in Budapest, and Gillian Wong, in Singapore, contributed to this report.