Crude oil on Monday reached its highest closing price since January on concern that oil producers might agree to hold back more production when they meet in Vienna this weekend.
But the cost of a gas tank fill-up still provided a measure of relief in the midst of otherwise gloomy economic news.
The average U.S. price of a gallon of self-serve regular gasoline climbed to $1.941, up 0.7 of a cent from the previous Monday, according to the Energy Department's weekly survey of filling stations. A year earlier, that same gallon of gasoline would have cost $3.225. California's average rose by 0.7 of a cent to $2.196 a gallon, far below the year-earlier price of $3.537.
Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey, said that motorists could expect to see a steady rise in gasoline prices to $2 to $2.20 a gallon nationally over the next few months and to $2.25 to $2.50 a gallon in California because of rising demand and the added expense of producing summer-blend gasolines.
In New York futures trading, crude oil for April delivery finished up $1.55 at $47.07 a barrel, the highest close since Jan. 6.
The Organization of the Petroleum Exporting Countries was giving out mixed signals during the day, said Phil Flynn, senior market analyst for Alaron Trading Corp. in Chicago, but the gist of the message was less oil production for world markets. Flynn said that probably would come from new reductions or better compliance with the cuts that OPEC announced last year.
Upward pressure on the commodity also was coming from two other sources, Flynn said.
Nigeria reported that another recent militant attack on a Shell Oil Co. oil pipeline had forced it to halt deliveries to several customers. Nigeria's military also claimed Monday to have thwarted a plot to attack a Chevron Corp. facility and its pipelines in the oil-rich Niger Delta. Nigeria is an important U.S. supplier of light, sweet crude that has already seen its daily production slashed by 600,000 to 2 million barrels a day.
In addition, traders were nervous about escalating tensions between U.S. and Chinese ships in the South China Sea, he said.
The Defense Department said Monday that five Chinese vessels "shadowed and aggressively maneuvered close" to an unarmed U.S. reconnaissance ship Sunday in the South China Sea, closing to within 25 feet.