Pump prices rise to new high as oil stalls - WMC Action News 5 - Memphis, Tennessee

Pump prices rise to new high as oil stalls

NEW YORK (AP) - Retail gas and diesel prices reached new records Monday, adding to the pressure on drivers planning road trips for the coming holiday weekend, while oil prices stalled following last week's record highs.

Americans are now paying an average of $3.79 for a gallon of regular gas, according to a survey by AAA and the Oil Price Information Service. Diesel, used to transport a wide range of goods, now costs $4.52 a gallon.

Drivers in some parts of the country are paying considerably more, however. Gas pump prices in parts of California, where the average is down to $3.96, have been stuck above $4 a gallon for weeks now. Prices in Alaska and Connecticut are averaging just above $4 a gallon statewide. 

A report released Sunday showed retail prices topped an average $4 a gallon for the first time in two metropolitan areas: Chicago and New York's Long Island. The Lundberg Survey of 7,000 stations nationwide found the cheapest city to be Tucson, Ariz., where a gallon of regular sold for $3.48 on average.

Pump prices may have further to go still, pressured by rising oil costs and soaring global demand.

"We're looking at $4 a gallon once we get past Memorial Day and into June, given the oil prices we're seeing today," said Geoff Sundstrom, fuel price analyst at AAA.

Light, sweet crude for June delivery slipped 9 cents to $126.20 a barrel on the New York Mercantile Exchange after trading higher for much of the morning. Futures surged to a trading record near $128 a barrel Friday.

Traders were little moved by a report Monday that the Organization of Petroleum Exporting Countries would not increase production before its next meeting Sept. 9.

"Current prices aren't linked to the law of supply and demand," said Algerian Energy Minister Chakib Khelil, the current OPEC president, according to a report in government newspaper El Moudjahid.

The announcement came days after Saudi Arabia's oil minister said the kingdom, the world's largest oil producer, had increased production by 300,000 barrels a day earlier this month.

Although the response in the trading pits to that move was tepid, the modest increase should nonetheless help grease a tight global market, said John Felmy, chief economist for the American Petroleum Institute, the industry's leading U.S. trade group.

"Certainly seeing increased production is helpful in terms of increased supplies," Felmy said.       Meanwhile, Holly Corp. said a key unit at its New Mexico refinery is down for repairs, cutting estimated gasoline production in May by as much as 756,000 gallons. The shutdown of the fluid catalytic cracking unit occurred while the piece of equipment was being brought back online from a previous shutdown May 7.

Holly's Navajo Refinery in Artesia, N.M. is the refiner's largest facility. Even so, the outage is unlikely to significantly affect fuel prices, said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates.

In other Nymex trading, heating oil futures fell 2.59 cents to $3.6769 a gallon. Gasoline futures were nearly flat at $3.2242 a gallon. Natural gas futures rose 6 cents to $11.154 per 1,000 cubic feet.

July Brent crude fell 57 cents to $124.42 a barrel on the ICE Futures exchange in London.

(Copyright 2008 by The Associated Press.  All Rights Reserved.)

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