NEW YORK – Retail gasoline prices rose Monday and oil prices rallied to the highest level in two months, though analysts say weak energy demand likely will push prices lower during the last three months of the year.
At the pump, the national average added a penny overnight at $2.718 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 3.5 cents more expensive than it was last week and 25.7 cents a gallon more than a year ago.
Analysts said gas prices have been tugged higher by the price of oil, which has lifted recently on a strong Chinese manufacturing report and continued pledges by the Federal Reserve to keep interest rates low. There also were reports over the weekend that the Houston Ship Channel will remain closed due to a damaged electrical tower. That could crimp supplies. Speculators also tend to pour into commodities markets at the beginning of the quarter, and that usually pushes prices higher as well, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
While gasoline demand perked up in September, it's still not strong enough to keep prices rising during the final three months of the year, Kloza said.
"People are driving less than they were last year, so you're not going to see prices rocketing higher," he said. "I wouldn't be surprised if you're paying less for gas on Thanksgiving Day than you will be on Columbus Day."
The Energy Information Administration expects retail gas prices to sit at a national average of $2.72 a gallon this year.
Benchmark crude for November delivery added 10 cents at $81.68 a barrel on the New York Mercantile Exchange. Earlier in the day it rose to $82.38, the highest level since Aug. 6. In London, Brent crude gave up 20 cents at $83.55 per barrel on the ICE Futures exchange.
In other Nymex trading, heating oil for November delivery fell less than a penny to $2.2916 a gallon, and gasoline for November delivery rose 1.47 cents to $2.1008 a gallon. Natural gas for November delivery dropped 8.4 cents to $3.713 a gallon.
Associated Press writers Pablo Gorondi in Budapest, Hungary and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.