WASHINGTON – Gasoline prices could remain at peak levels beyond the usual July-August period, if motor fuel demand is more than expected later this summer, the government said on Wednesday.
Retail gasoline climbed this week to a record $2.33 a gallon nationally, on rising crude oil prices and strong petroleum demand.
Pump prices could go higher if fuel demand picks up in late summer and refiners have already switched to making heating oil for the upcoming autumn and winter, the Energy Information Administration (search) said.
U.S. gasoline demand over the last four weeks has averaged 9.4 million barrels per day, up 2.3 percent from the same period last year, the Energy Department's (search) analytical arm said.
With demand up, gasoline inventories fell 2.7 million barrels last week, putting fuel stocks in the upper half of the average range for this time of year.
"As long as gasoline markets remain tight, greater price volatility can be expected," the EIA said in its weekly review of the oil market.
The agency said hurricanes, refinery outages, pipeline breaks and surges in demand will create a "larger price response" when incremental gasoline supplies are limited because of little spare refining capacity.
To help lower record gasoline prices, Rep. Edward Markey, a Massachusetts Democrat, on Tuesday urged the Bush administration to immediately release crude oil from the Strategic Petroleum Reserve (search).
However, the administration says the emergency stockpile, which holds around 697 million barrels of oil, should used only in a severe supply disruption and not to control prices.