June 27, 2005

Gas prices rise nearly 8 cents a gallon-Lundberg

By Jonathan Stempel

NEW YORK (Reuters) - The average retail price of a gallonof gasoline in the United States rose nearly 8 cents in thelast two weeks amid surging demand, and the record price forthe most popular grade of gas may soon be surpassed, a leadingoil industry analyst said on Sunday.

The national average price for all three grades of gas was$2.2383 on Friday, up 7.7 cents from $2.1612 two weeks ago,according to Trilby Lundberg, who publishes the Lundberg Surveyof about 7,000 U.S. gas stations.

The average for self-serve, regular unleaded gasoline, themost popular grade, was $2.2109 a gallon, up 7.8 cents, shesaid. The average price for midgrade was $2.3073, up 7.5 cents,and premium cost $2.4030, up 7.4 cents from $2.3291.

"Retailers and refiners lost some of their profit margins,"Lundberg said in an interview. "The rise in crude oil prices inthe two-week period suggests a 15 cent-per-gallon increase inpump prices. That means retailers and refiners will be underpressure to recover that difference, which means we can expectfurther upward pressure in retail gas prices."

Lundberg also said economic growth is driving increaseddemand, supporting price increases.

U.S. crude for August delivery on Friday settled up 42cents at $59.84 a barrel, on worries of potential supplytightness in the coming months. It had hit an intraday recordof $60 on Thursday, the highest since the New York MercantileExchange launched crude oil futures trading in 1983.

Self-serve, regular unleaded peaked at $2.2888 a gallon onApril 8. A year ago, the same gas cost $1.9429 a gallon.

"It is certainly possible that in the next few days, gasprices will exceed that all-time record, but if crude oilprices were to fall $3 or $4 per barrel, gas prices wouldstabilize and probably fall," Lundberg said.

Of the stations surveyed, the highest price for a gallon ofself-serve, regular unleaded gas was $2.46 in Honolulu.Charleston, South Carolina, saw the lowest price at $2.04, andin Los Angeles, the biggest U.S. gasoline market, a gallon ofgas will cost $2.38.