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Gasoline Prices Up Less Than 1 Cent

U.S. average rises for the first time in nine weeks. West Coast drivers still pay the most.

May 20, 2003|From Bloomberg News

The average U.S. retail price for gasoline rose for the first time in nine weeks, climbing 0.7 cent to $1.498 a gallon as crude oil costs increased, the Energy Department said Monday. On the West Coast, gasoline prices remained the highest in the country, even though they fell slightly from last week.

The price of crude, which accounts for almost half of the cost of making gasoline, has risen as much as 14% since the end of April, partly on expectations that Saudi Arabia and other top producers will cut production starting next month.

With crude prices up and the summer travel season near, gasoline prices may not fall much beyond levels reached earlier this month, analysts said.

"We're leading up to Memorial Day, so increased demand pressures and increased supply costs due to crude oil" are causing higher prices, Energy Department economist Doug MacIntyre said. "We've started seeing crude oil and wholesale gasoline prices go up."

The nationwide average for self-serve regular gasoline is down 23 cents, or 13%, from a record $1.728 in the week ended Monday but is up 7.2% from $1.397 a year ago. The average U.S. price of $1.491 in the week ended May 12 was the lowest since the week of Jan. 27.

In the West, self-serve regular averaged $1.735 a gallon, down from $1.784 the previous week, the Energy Department said. Prices averaged $1.887 in San Francisco and $1.799 in Los Angeles. The West Coast average was up from $1.505 a year ago.

Crude oil reached a three-week high of $29.48 a barrel May 15, after ending April at $25.80, based on New York Mercantile Exchange futures. The price Monday was $28.88.

"If crude prices stay up at $29 or more, it's likely we may have seen a near-term low" in retail gasoline prices, MacIntyre said.

Oil accounted for about 48% of the retail gasoline price in April, with the rest reflecting taxes, refining, distribution and marketing, the Energy Department said. Every $1 move in crude prices typically results in a corresponding move of about 2.5 cents in gasoline, analysts estimated.

Prices were lowest in the Gulf of Mexico region at $1.369 a gallon, down from $1.373 the previous week. East Coast prices averaged $1.450 a gallon, down 1 cent, and Midwest prices averaged $1.475, up 6.2 cents. Chicago gasoline averaged $1.566 a gallon, up 5.5 cents from the previous week.

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