Gasoline prices jump past $2
— -- The average price of gasoline in the U.S. jumped 2.8 cents overnight to $2.169 for regular Friday, an enormous leap by recent standards.
The average is up 12.2 cents the past month, after having seemed stuck around $2.
But the sudden move is unlikely to be harbinger of a record year.
The jump in pump price reflects even bigger increases in wholesale gasoline prices, and those reflect "crowd behavior" more than market fundamentals, says Tom Kloza, senior analyst at the Oil Price Information Service. Thus, a repeat of last year's run-up to a record average $4.114 in mid-July is all-but-impossible, he says.
"There's more oil and more refining capacity than we've had" in a long while, he says, and "demand is lowest since May 1999."
Benchmark crude oil for June delivery rose $1.92 Friday to settle at $58.63 a barrel, its top closing price this year on the New York Mercantile Exchange.
The government's most recent forecast, published April 14, says the full-year average for gasoline in 2009 will be $2.179, about where it is now. Next year, it will average $2.42, the Energy Information Administration (EIA) says. Average for the April-September driving season will be $2.23, the agency says.
The agency's next forecast is due Tuesday. Holding gasoline prices down:
Good supplies. Other countries favor diesel. "The U.S. is the last big wholesale gasoline market," Kloza says. As a result, foreign refiners send their gas here, which, combined with U.S.-refined gasoline, is creating an abundance that works to keep prices in check.
Refineries operated at just 85.3% of capacity, yet turned out an average 420,000 barrels of gasoline a day more than a week earlier, the EIA reported at mid-week. Oil inventories at mid-week were up 600,000 barrels from the previous week, at 375.3 million barrels. EIA called that above-average.
Low demand. The continuing worldwide recession has sliced the need for motor fuels. Spending-wary consumers have eroded demand for the goods delivered by big users of fuel such as truck fleets, airlines and railroads. Demand in the past four weeks for the category of fuel that includes diesel was down 14.1% from a year ago, EIA said in its mid-week report. Jet fuel use was off 11.6%
