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Gas prices beginning to edge higher

01:00 AM EST on Tuesday, January 13, 2009



Journal staff and wire reports

It is not your imagination — gasoline prices in Rhode Island are inching up.

The average price of a gallon of regular, self-serve gasoline yesterday was about $1.78, according to a survey by the state Office of Energy Resources.

That is up 7 cents a gallon from last week’s average of about $1.71 — an increase of 4 percent in one week.

It is the second straight week in which gas prices have risen, according to the AAA Southern New England auto club.

It is still a far cry from the record-setting prices of more than $4 a gallon reached in June and July.

But the increases bear watching.

After hitting a peak last summer, gas prices generally declined following a consistent drop in crude oil prices right through the Christmas holiday season, said Lloyd P. Albert, the auto club’s senior vice president of public and government affairs.

In the past 10 days or so, however, oil prices have risen — and gas prices have, too, he said.

Albert said he sees continued volatility in the oil markets, though not necessarily higher gas prices.

Also yesterday, the state energy agency reported that a gallon of diesel fuel cost an average of about $2.62 in Rhode Island, up a bit from the previous week.

The average price of home heating oil in Rhode Island yesterday was about $2.42 a gallon, up from about $2.37 last week, according to agency figures.

Nationwide, the average gas price was also $1.78 a gallon, having risen on speculation that refinery maintenance may reduce stockpiles.

The motor fuel gained 12 cents a gallon, or 7.2 percent, in the three weeks that ended Friday, according to oil analyst Trilby Lundberg’s survey of 7,000 filling stations nationwide.

“This is simply a bounce after hitting bottom finally and it reflects a slight change in our demand behavior,” Lundberg said in a Bloomberg Radio interview. “Demand at these much lower prices is not down as much as it was in the fall, although it is still down.”

U.S. gasoline use was down 3.4 percent from a year earlier in the week ended Jan. 2, according to the U.S. Energy Department.

Gasoline futures were buoyed in the past two weeks by a rise in crude oil prices on concern conflict in the Gaza Strip may spread, disrupting oil supplies from the Middle East. Crude oil accounts for 60 percent of prices at the pump, according to the Energy Department.

AAA, the nation’s biggest motoring club, said yesterday that regular gasoline at the pump averaged $1.792 a gallon, up 11 percent from $1.616 on Dec. 30.

U.S. refiners were using 84.6 percent of capacity in the week ending Jan. 2, compared with 91.3 percent a year earlier, according to the Energy Department.

Chevron Corp., the second-largest U.S. oil company, said yesterday that it shut the fluid catalytic cracker and associated units at its 274,000 barrel-a-day El Segundo refinery in Southern California for several weeks.

Exxon Mobil Corp., the world’s largest oil company, said it shut a fluid catalytic cracker, a hydrotreater and an alkylation unit at the 155,800- barrel-a-day Torrance, Calif., refinery for several weeks of planned maintenance Dec. 30.

The highest average price for self-serve regular gasoline in the United States was $2.32 a gallon in Anchorage, Alaska, Lundberg said. The lowest was in Billings, Mont., at $1.34 a gallon.

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