Gas Prices Hit Record $3.196 Per Gal.

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Monday May 21, 11:04 pm ET
By Stan Choe, AP Business Writer

Average Gasoline Prices at Pump Set New Record at $3.196 Per Gallon; Crude Futures Jump

NEW YORK (AP) -- Retail gasoline prices climbed to another record Monday, while crude oil futures jumped above $66 per barrel amid concerns about gasoline supply heading into the peak summer driving season.

A gallon of regular unleaded costs an average of $3.196 across the country, up from $3.178 on Sunday, according to AAA and Oil Price Information Service. Prices are up 33.7 cents from a month ago and 30.4 cents from a year ago, as demand remains strong, and a spate of planned and unexpected refinery shutdowns have constricted supply.

\"As we start a new week, we have an insanely bullish market -- which has already advanced to absurdly high levels,\" Cameron Hanover's Peter Beutel wrote in a research report. \"We are running seven weeks behind normal this refinery turnaround season, after taking an extra seven or eight weeks in the fall to maintain refineries.\"

The U.S. Energy Information Administration reported last week that gasoline inventories -- while increasing to 195.2 million barrels for the week ended May 12 -- are still well below the average for this time of year because of high demand and an unprecedented number of refinery outages this spring. The nation's peak driving season, meanwhile, is set to begin this long Memorial Day weekend.

Gasoline futures for June delivery slipped less than a penny to settle at $2.4013 per gallon on the New York Mercantile Exchange.

Light, sweet crude for June delivery jumped $1.33 to $66.27 per barrel on the Nymex after earlier falling as low as $64.45. Brent crude for July delivery added $1.07 to $70.49 on the ICE Futures exchange in London.

Citigroup Global Markets energy analyst Tim Evans said there was no one reason for the jump in crude prices, which followed some weakness in morning trading. \"It doesn't have to have a reason,\" he said.

The June crude contract on the Nymex expires Tuesday, meaning \"it only takes a stiff breeze to move it,\" Evans said.

Attackers in Nigeria vandalized an oil installation run by Total SA, the company said Monday. No injuries, kidnappings or production cuts were reported, though.

The attackers caused \"a couple of barrel's worth\" of oil to spill, but production wasn't affected, a Total spokeswoman said. Nigeria is one of the world's largest crude producers, and attacks on oil installations have become an almost daily occurrence following elections there last month.

The next few days likely will be volatile for oil and gasoline futures, said Jim Ritterbusch of oil trading advisory firm Ritterbusch and Associates.

The inauguration of a new president in Nigeria could lead to more violence, which would drive up prices. The federal government also will release its updated hurricane outlook.

\"That's liable to push things around a bit,\" Ritterbusch said. \"We've got things going on here in the next few days.\"

In other Nymex trading, heating oil futures rose 3.57 cents to $1.9509 a gallon while natural gas prices fell 3.1 cents to $7.913 per 1,000 cubic feet.

Associated Press writers George Jahn in Vienna, Austria, Derrick Ho in Singapore and Katharine Houreld in Lagos, Nigeria contributed to this report.