Gasoline prices swing higher before holiday

NEW YORK -- Retail gasoline prices continued to climb Friday ahead of the Memorial Day weekend and the unofficial start of America's summer driving season. The national average pump price increased nearly 3 cents overnight to $2.391 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Gasoline prices have ticked higher every day this month and have surged though a crude rally appears to have stalled.

Benchmark crude for July delivery rose 62 cents to settle at $61.67 a barrel in light, pre-holiday trading on the New York Mercantile Exchange. In London, Brent prices increased 36 cents to $60.29 a barrel on the ICE Futures exchange.

Refiners have been turning less oil into gas with millions of people driving less in the recession. That is one of the reasons there is a divergence in price between oil and gas.

Gas is 32.9 cents a gallon more expensive than last month, but it's still $1.44 a gallon less expensive than a year ago when fears of an oil shortage sent energy prices soaring.

In the lower-48 states, gas prices ranged from an average of $2.20 a gallon in Arizona to $2.62 a gallon in California. Gas in Florida cost an average of $2.40 a gallon, while in Nevada it cost average $2.36 a gallon to fill up.

Michael Lynch, president of Strategic Energy & Economic Research, said the national average probably won't go much higher than $2.40 a gallon.

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"In the last five years or so," Lynch said, "there's a tendency for the price to peak out at or before the start of driving season."

Crude prices have held around $60, partly due to the falling value of the dollar. Crude is priced in dollars, so it becomes cheaper on international markets when the dollar falls.

The dollar fell Friday to a four-month low against the euro. By midday, it was trading at $1.3979. The dollar bought 94.67 yen, down from 99 yen two weeks ago.

Oil supplies have been in flux recently. OPEC countries have boosted exports by an estimated 200,000 barrels a day in the four weeks to June 6, according to tanker tracker Oil Movements.