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NEW YORK -- Almost overnight, already high gasoline prices have shot up to record levels -- just in time for the height of the summer driving season -- in reaction to storms in the Gulf of Mexico and steady demand.
Nationally, the average retail price for regular-grade gasoline jumped 10.2 cents in the past week to a record $2.328 a gallon, the Energy Department said Monday. That surpassed the previous all-time high of $2.28 a gallon on April 11. Pump prices are up 21 percent from $1.917 a gallon a year ago.
Gasoline prices are up in every region of the country, according to the government survey of 1,200 filling stations.
"It's not the station operators," said Tom Kloza, chief oil analyst for the Oil Price Information Service (OPIS) in Lakewood, which compiles pricing data for AAA.
"From June 30 to July 6, the wholesale increase for gasoline … was up 25 cents," he said. "It was down 4 cents [Monday], but could be up 8 cents tomorrow."
Years ago, prices might move a penny or two a day, 5 cents to 10 cents a week, he said. "Now, it's very common to see moves of more than a nickel, 14 to 15 cents in futures markets. It's just incredibly volatile."
And don't expect a reduction anytime soon, Kloza said. Even with the big increases recently, pump prices haven't caught up with wholesale prices, so further increases are likely.
He cites two key factors: the "storm surge," the fear that the recent tropical storms and hurricanes might force refineries to shut down, and the fact that high prices have not slowed demand.
"This is a summer of fear," he said. "Cindy was a minimal storm, but it still delivered inconveniences to refineries in the New Orleans area. Then, all of a sudden, here comes Dennis."
Nether storm had any major impact on production or supplies, but they served notice that it is not safe to be short in oil markets, he said.
At the same time, people are driving more, he said. Last year, record prices around Memorial Day led to a dropoff in summer driving and a reduction in prices. This year, driving is up nearly 3 percent.