Gas Prices Live

This week in gas prices started with another record-breaking national average, according to AAA’s fuel gauge report.

The national average for a gallon of regular unleaded gasoline rose to $4.08 on Monday, June 16, ending the week at an average of $4.07. Not much of a difference over last week’s $4.06 a gallon.

California ended the week with the highest prices at $4.60 a gallon, trumping even Hawaii’s $4.34 and Alaska’s $4.51 a gallon for regular unleaded. Oklahoma’s statewide average won the lowest state average, ending the week at $3.83 a gallon.

Oil futures continued to hover in the mid $130s for a barrel of sweet crude, while legislators verbally batteled out theories and solutions to rising energy costs.

Republican presidential candidate John McCain outlined his energy plan this week, saying opening more offshore drilling and easing regulations on refining construction could prompt lower prices.

But the Energy Information Administration has said refining levels are lower this year than last year, due in part to rising input costs. In fact, demand is not enough to raise levels - in January and February, supply actually outweighed demand.

President George W. Bush said opening more offshore areas for drilling would help bring prices down. Of expanding drilling in the U.S., U.S. Representative Nick J. Rahall (D-WV) this week noted that 81 percent of the land avaialble for drilling is not being utilized by the oil and gas conglomerates.

Just when you thought an $11 hike in one day couldn’t be sustained, the oil market proved you wrong.

Oil prices jumped to a record $139 a barrel on Friday, June 6, but dropped about $4 on Monday, June 9. Unfortunately, prices hiked up another $6 Wednesday morning, June 11, before settling down to a less-than-meager $5 above Tuesday’s prices to $136.38.

What?

That means we’ve barely made up for Friday’s peak. Gasoline futures for July rose nearly 15 cents. Average gas prices in the United States for regular unleaded were posting at $4.05, according to AAA’s fuel gauge report.

The Energy Department predicted last week futures would drop to fall in line with the nation’s dipping consumption; but demand remained steady enough to push prices even higher, draining pocketbooks.

On the hill, consumers saw the defeat of the Consumer-First Energy Act in the Senate; Republicans pushed the Democrat-backed bill - a comprehensive piece of legislation which pushed for windfall taxes and margin regulations, as well as allowed the U.S. Attorney General to sue OPEC for monolopy rights, among other aggressive tactics - out the door, saying more taxes would only encourage higher prices.

Democrats promised a come-back with more specific legislation and regulation.

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It wasn’t just about drivers this week.

Massive increases in fuel costs meant about 4,000 jobs were slashed in the airline industry this week when Continental Airlines and United Airlines announced cutbacks.

Continental said 67 planes would be grounded; United Airlines planned to ground 70 planes and shut-down its budget airline, Ted.

Rising fuel costs have meant additional fees and higher prices for travelers; nearly all low-cost airlines have filed for bankruptcy protection while industry giants reduce staff and schedule capacity, ground planes and stamp extra fees onto consumers’ tickets.

On the ground, the picture this week was just as grim.

As of June 4, a barrel of crude was up a slick $62.26 from last year but down $4.23 from the previous week.

That meager drop in price has done nothing to relieve the dollars at the pump, as oil margins continue their tight yo-yo, challenging records nearly every week. The national average for a gallon of regular unleaded once again hit a record high on June 5, posting $3.989 a gallon. That’s more than 80 cents higher than this time last year.

Diesel fuel price hikes paint a seeming unending climb above 2006-2007 averages. This week, diesel’s $4.70 a gallon was nearly $2 higher than the same time last year.

What’s changing?

For diesel, a change in the refining requirements made producing the fuel more costly, among other things.

Fuel marketers are quick to point to speculators as the enemy, however; in fact, concerns about the U.S. demand peaking and causing a world-wide shortage within five years sent traders running for supply mid-2007. But the paper trading hasn’t slowed, despite a nationwide decrease in consumption of nearly 1 percent for the beginning of 2008, according to the Petroleum Marketers Association of America.

Legislators are beginning to take notice. It’s hard not to; gas affects every red-blooded driver – and voter - in the United States.

Keep watching www.gaspriceslive.com for more information on price changes, proposed legislation, economic fallout and, ultimately, to keep tabs on the price of a gallon of gas in your area.

Reach Crystal Reid at creid@gaspriceslive.com

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