Gas Prices Set New Record
Monday May 14, 11:43 am ET
By John Wilen, AP Business Writer
Gas Prices at the Pump Exceed Post-Katrina Record, While Futures Slip
NEW YORK (AP) -- Gasoline prices hit a new record at the pump on Monday, but traders sent oil and gasoline futures prices in different directions as they weighed mixed news from overseas.
The average national price of a gallon of gas hit $3.073 on Monday, up almost a penny from Sunday's also record-setting price. Gasoline is now well above the previous record of $3.057, set on Sept. 5, 2005, soon after Hurricane Katrina hit.
But gasoline futures for June delivery fell 2.09 cents to $2.3312 in midday trading on the New York Mercantile Exchange. Light, sweet crude for June delivery rose 36 cents to $62.73 a barrel on the Nymex.
Heating oil futures fell less than a penny to $1.8761 per gallon on the Nymex, while natural gas prices gained 17.3 cents to $8.072 per 1,000 cubic feet.
Brent crude for June rose 6 cents to $66.89 a barrel on the ICE Futures exchange in London.
Chip Hodge, energy portfolio manager at John Hancock Financial Securities, in Boston, thinks gasoline futures traders may be reacting psychologically to the fact that gas prices at the pump are setting new records.
"You just get a feeling that $3 a gallon ... it's got to have an impact from a demand standpoint," Hodge said. "So, maybe there's a little bit of a selloff on those pressures."
While oil prices were higher on the day, they were well off their earlier highs on news that Chevron Corp. plans to restart a 42,000 barrels-per-day Nigerian oil facility, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
"There was good news out of Nigeria after a lot of bad news," Flynn said. "They're pumping oil again."
But that good news was tempered by new reports of refinery outages, including a fire at a large Preem facility in Sweden, and a quickly resolved problem at a Valero Energy Corp. refinery in Texas last week.
"Any refinery problems anywhere on the globe now adds to concerns" that gasoline supplies won't be adequate to meet peak summer driving demand, Flynn said.
The summer driving season begins in two weeks, on Memorial Day. The government reported that gasoline inventories rose slightly last week, but remain low by historic standards.
"Tightness in the U.S. gasoline situation will continue to drive the market ... because the summer driving season is right around the corner," said Victor Shum, energy analyst with Purvin & Gertz in Singapore. "There's not a lot of time for refineries to catch up with demand."