Getting home for the holidays could involve paying the year’s highest price for gasoline.
The national average for a gallon of unleaded regular gasoline on Monday was just 3 cents shy $2.92 a gallon, the high set back in May. Analysts expect more upward price creep before the long Thanksgiving holiday weekend starts next Wednesday.
There’s no expectation of a holiday driving frenzy, however. Instead, the higher gas prices can be traced to the rising price of oil, up 15 percent since Labor Day and 4 percent this month. Investors worried about a sluggish U.S. economy and weaker dollar have parked their money in commodities like oil.
The national average for a gallon of unleaded regular gasoline was $2.892 Monday, according to AAA, Wright Express and Oil Price Information Service. That was about 6 cents more than a month ago and nearly 26 cents more than a year ago.
“Fundamentally, we shouldn’t see prices that high,” said Fred Rozell, retail pricing director at Oil Price Information Service in Wall, N.J.
Rozell said the national average “may flirt” with $3 a gallon before year’s end. PFGBest analyst Phil Flynn was more cautious, calling $3 possible but not inevitable.
Many Americans already are paying $3 a gallon or more. For example, drivers in California, Oregon, Hawaii, Washington, Illinois and New York are seeing prices in a range between $2.981 a gallon and $3.524 a gallon.
In Los Angeles, the retail price was $3.155 cents a gallon, up about 4 cents from a week ago. Chicago-area drivers paid an average of $3.11 a gallon, an increase of a penny from a week ago. Detroit had a 2 cent drop, but drivers there are still paying $3 a gallon.
The lowest average prices were found in Colorado, Texas and parts of the South.
Meanwhile, oil prices were little changed after earlier gettng a boosts from a report showing U.S. retail sales rose for the fourth consecutive month in October, buoyed by stronger demand in the automobile market.
The Commerce Department said consumer spending rose 1.2 percent, nearly double what analysts were expecting.
Excluding autos, however, sales advanced at a more moderate 0.4 percent in October following a 0.5 percent rise in sales excluding autos in September.
Economists don’t expect consumers to significantly boost spending while unemployment remains high.
Still, oil traders were encouraged by the report, after crude fell Friday on concerns that China would take steps to cool its economic growth.
“The market is going to take a wait-and-see position. I think people think they maybe overreacted to it a little bit on Friday and they’re creeping back into the market,” Flynn said.
Christof Ruhl, the chief economist at BP PLC, expects oil prices to hover around $80 a barrel in 2011. He said there might be “a little upward shift if the economy continues to grow,” though the sustainability of China’s economic growth was a key risk.
Benchmark oil for December delivery slipped 2 cents to $84.86 a barrel in trading on the New York Mercantile Exchange.
In other early Nymex trading in December contracts, heating oil added 0.77 cent to $2.3709 a gallon, gasoline rose 2.49 cents to $2.1950 a gallon and natural gas rose 4.6 cents to $3.845 per 1,000 cubic feet.
In London, Brent crude rose 36 cents to $86.70 a barrel on the ICE Futures exchange.