U.S. gas prices already at summer levels

April 12, 2007 at 9:07 AM
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NEW YORK, April 11 (UPI) -- Rising U.S. retail gasoline prices have already reached summer peak-driving levels and may top $3 a gallon, petroleum industry analysts say.

"It just keeps piling on and piling on," Senior Vice President John Kilduff of the energy trading company Fimat USA in New York said. "It looks like the national average will hit $3 a gallon by Memorial Day."

Refiners' gasoline profit margins are the greatest they have been since Hurricane Katrina hit in August 2005, damaging or destroying 30 oil platforms and closing nine refineries, The Christian Science Monitor reported Wednesday.

Despite several years of rising prices, U.S. gasoline demand continues to increase, analysts say.

"When you look at the data, you see some refinery capacity increases, but demand increases have resulted in tighter markets," American Petroleum Institute chief economist John Felmy in Washington said.

It's not unusual for gasoline prices to rise in the spring as refiners shift over to the summer grade of gasoline, which is more expensive to produce.

But this year the price rise since February -- about 61 cents a gallon -- has been the fastest since 2000, National Association of Convenience Stores spokesman Jeff Lenard said.

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