Thursday, March 26, 2009
COLUMBUS (AP) — Oil prices faded Wednesday as a government report showed U.S. crude inventories rising to levels last seen in 1993.
Benchmark crude for May delivery fell $1.21 to settle at $52.77 a barrel on the New York Mercantile Exchange, one day after closing at a high for the year.
Crude in storage last week rose 3.3 million barrels, according to the Energy Information Administration, much more than what was expected by analysts.
It was another story at the pump, where prices continued their seasonal rise. National retail gasoline prices hit the highest level since Nov. 21 and are on pace to surpass $2 by Friday with one analyst suggesting prices may go as high as $2.25 this spring. The average gallon of regular gas has risen 6 cents this week.
Gasoline usually heads higher this time of year as refineries shut down for maintenance ahead of the summer driving season, but they’ve shut down earlier this time because Americans are driving a lot less.
Prices hit $1.986 Wednesday, according auto club AAA, Wright Express and Oil Price Information Service. Prices are 7.6 cents higher than a month ago, but $1.269 below year-ago levels.
Oil prices rallied all last week and again on Monday amid gains in stock markets and optimism about a U.S. government plan to buy up toxic assets from banks. A weaker dollar has also caused investors to flee to commodities such as oil.
Oil prices have risen about 30 percent this month even as supplies continue to rise.
Demand for gasoline over the four weeks ended Friday was 0.7 percent higher than a year earlier, averaging nearly 9.1 million barrels a day.
Refineries ran slightly below what was expected by analysts.
Price increases for gasoline are typical around now, but Tom Kloza, publisher and chief oil analyst for OPIS, said prices will be nowhere like they were last summer when gasoline hit $4.11 a gallon. He said the weak economy and demand along with excess refining capacity should keep prices in check.