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As pump prices rise, chances for late-summer price breaks seem unlikely
The chances for late-summer discounts at the gas pump are looking pretty slim.
Americans are paying about 15 cents more for a gallon of gas now than they did over the July Fourth weekend and nearly $1 more than a year ago. The national average for a gallon of regular was $3.695 a gallon Friday, up 0.6 cent overnight, according to AAA, Wright Express and the Oil Price Information Service.
In a rare twist, California drivers aren't paying the highest prices in the lower 48 states. That unwelcome distinction belongs to the Northeast. Refinery and import issues have tightened supplies there, while gas is more plentiful in California, according to Fred Rozell, retail pricing director at OPIS.
California drivers paid an average of $3.813 a gallon on Friday. Motorists paid $4.036 a gallon in Connecticut and $3.944 in New York. Prices in Hawaii and Alaska still top $4 a gallon. The cheapest prices were in the Rocky Mountains, Mississippi and parts of the Midwest.
Analysts expect gas prices to be fairly consistent in the next few months, barring a hurricane that threatens Gulf Coast refinery operations or significant economic news affecting the price of oil, Rozell thinks pump prices will remain in a narrow range for the rest of the year before they climb again next spring.
Oil prices were a little higher at midday Friday as U.S. lawmakers continued to debate spending plans and raising the nation's debt ceiling. Failure to raise the limit by the Aug 2 deadline means the U.S. would default on its debt.
Benchmark West Texas Intermediate crude rose 69 cents to $99.82 a barrel on the New York Mercantile Exchange. Brent crude gained 96 cents at $118.47 per barrel on the ICE Futures exchange in London.
Investors worry that failure to resolve debt problems in the U.S. and Europe could cause the global economy to slow, and cut demand for commodities such as oil.
Fitch ratings agency said Greece will be in default on its debt as a result of a new bailout plan crafted by European leaders that asks investors to take losses on the country's bonds.
Debt issues on both continents have "played havoc with the price of oil in recent weeks," PFG analyst Phil Flynn said. Since the beginning of the month, the price of oil has ranged from about $94 a barrel to just over $100.
The dollar has contributed to oil's volatility. It's been up and down against major currencies this month. Oil, like most commodities, is priced in dollars. If the dollar weakens, oil becomes more of a bargain for investors who use other currencies and the price tends to rise.
In Friday trading for other Nymex contracts, heating oil rose 4 cents to $3.1482 per gallon, gasoline futures gained 3 cents at $3.0870 per gallon and natural gas rose 2 cents to $4.377 per 1,000 cubic feet.