ICS Magazine

Gas prices add to record gains

April 7, 2008

April 7, 2008 – (AP) -- Gas prices rose further into record territory Monday, pulled higher by resurgent oil futures and a growing belief that gasoline supplies are falling as the summer driving season approaches.

Oil futures, meanwhile, jumped by more than $2 a barrel as traders bet the Federal Reserve will continue cutting interest rates. Comments from OPEC suggesting the cartel plans no production increases also boosted oil prices.

At the pump, the national average price of a gallon of gas jumped 3.6 cents over the weekend to a record $3.339, according to AAA and the Oil Price Information Service. That's 58 cents higher than a year ago. In New York Mercantile Exchange trading, May gasoline futures rose 2.68 cents to settle at $2.7835 a gallon.

The Energy Department expects retail gas prices to peak above $3.60 a gallon later in the spring, said Guy Caruso, head of the department's Energy Information Administration, according to Dow Jones Newswires. Many analysts see prices peaking closer to $4 a gallon.

Gas prices are following crude futures higher, but they're also rising on concerns about supplies and demand. Analysts say refiners have cut back on gasoline production due to low profit margins; the rising price of crude means it costs them more to refine gas.