Gas price tops $3 again, a first for November

The nationwide average gasoline price ticked above $3 a gallon Monday to the highest in more than three months as climbing oil prices pushed up prices at the pump.

The average gas price has never topped $3 in November, a development that adds to uncertainty about how much consumers will spend when faced with higher energy bills heading into the holiday shopping season.

The U.S. average price for a gallon of regular was $3.004, up 24 cents from a month ago and 80 cents higher than a year ago, motorist club AAA and the Oil Price Information Service (OPIS) said. It was the first time the average price was above $3 a gallon since mid-July.

In a separate survey, the government said the U.S. average gasoline price was $3.013 a gallon Monday.

So far, rising gasoline prices have not led to a pullback in consumer spending, the engine of the U.S. economy, as incomes have risen faster than the price at the pump, says Michael Niemira, chief economist at the International Council of Shopping Centers. But if they last, the high gas prices are an added worry for a holiday season that is likely to be steady but by no means stellar. Lower-income consumers will be most affected.

"It's there. It's worrisome. It adds to other problems," Niemira says, noting recent surveys by the group have shown housing remains the top concern among consumers.

"If it sticks, it's going to be more and more of a force" on consumers, says James Paulsen, chief investment strategist at Wells Capital Management.

Prices were at or above $3 in 23 states Monday, according to AAA and OPIS. The highest statewide average was in California at $3.255 a gallon; the lowest was in New Jersey at $2.792.

The gains have come as oil prices have shot up in recent months in response to strong demand and tight supplies worldwide. Oil costs account for nearly two-thirds of the retail gasoline price, according to the Energy Department.

On Monday, the price of a barrel of light, sweet crude trading for delivery in December was $93.98, down from Friday's record close of $95.93. Prices have risen 24% in the past two months and are up 57% from a year ago.

"It's all due to crude oil," says Kevin Lindemer, head of the energy group at Global Insight, of the run-up in gasoline.

OPIS analyst Tom Kloza says while gasoline prices have a little bit of catching up to do to reflect the recent oil surge, prices are unlikely to go dramatically higher. That's mainly because demand has softened as consumers have found ways to cut back on driving in response to the higher gasoline costs.

"I don't believe that we'll flirt with (record) highs," Kloza says.

The record gas price, not adjusted for inflation, was $3.227 May 24.