Gas prices probably won't rocket like last summer
— -- Relax, motorists. The big run-up in gasoline prices at the pump, 45 cents a gallon in the past month, may soon ease, many oil and gas analysts say.
"Most of the increase has been taken," says Tom Kloza, chief oil analyst at the Oil Price Information Service.
The rapid rise — which has surpassed earlier predictions — has been driven by expectations of a global economic recovery later this year and seasonal increases from Memorial Day to the summer driving season, industry analysts say.
The national average price for a gallon of regular gasoline was $2.50 Sunday, auto club AAA says. That's up 55% for the year and higher than the average $2.23 a gallon that the U.S. Energy Information Administration (EIA) had projected for the summer. But it's far below the $4 a gallon of last summer.
Oil prices have likewise jumped. They hit $66.31 a barrel on Friday, up 30% in May. They've similarly been driven higher by expectations of an economic recovery.
Benchmark crude for July delivery rose $2.27 Monday to settle at $68.58 a barrel on the New York Mercantile Exchange, the highest close since early November.
Brokerage CLSA Asia-Pacific Markets said its purchasing managers index rose to 51.2 from April's 50.1 on a 100-point scale, indicating that the world's third-largest economy might be recovering from a slump. Numbers above 50 show an expansion. The state-sanctioned China Federation of Logistics and Purchasing reported that its index had eased, but that manufacturing was still expanding somewhat.
When crude prices were heading toward $150 per barrel last year, many energy analysts believed the booming economies of China and India would support energy prices globally.
That did not turn out to be the case and there is little tangible evidence to suggest that the rapid rise in energy prices can be sustained for long this summer.
Also affecting prices: The EIA, which is the Energy Department's statistical arm, said last week that U.S. crude oil stocks fell 5.4 million barrels in the week ended May 22.
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