Gas Jumps Three Cents a Gallon Overnight


John Wilen
Associated Press
May 8, 2008

NEW YORK (AP) – Gas prices jumped nearly 3 cents overnight to a new national record of nearly $3.65 a gallon Thursday, while oil prices paused from their own climb to record highs and succumbed to mild profit-taking.

At the pump, the average price of a gallon of regular gas nationwide rose 2.7 cents to a record $3.645, according to a survey of stations by AAA and the Oil Price Information Service. Diesel prices also rose, adding 0.9 cent to match a record national average of $4.251 a gallon.

Gas prices tend to lag oil futures, and with crude rising to a new record near $124 a barrel Wednesday and likely headed higher, it’s widely expected the average price of gas will soon rise as high as $4. Motorists in many areas, including parts of California and Hawaii, are already paying that much, or more.

“If oil prices go the way that pundits are expecting, there’s no way we’ll stay under $4 a gallon,” said Fadel Gheit, an analyst at Oppenheimer & Co. in New York.

Meanwhile, light, sweet crude for June delivery fell 12 cents to $123.41 a barrel on the New York Mercantile Exchange Thursday but alternated between gains and losses. Prices rose as high as a record $123.93 on Wednesday.

Analysts said there was little in the way of news driving Thursday’s oil moves. Investors occasionally sell a little during rallies to lock in profits, Gheit said. But bullish momentum—and expectations that the dollar will continue to weaken against foreign currencies including the euro—are likely to keep pushing oil to new records, he said.

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