Gas Prices Climb as Crude Oil Supplies Drop

With oil costs surging past $90 a barrel, gas prices climbed to an average of $3 a gallon this week, the highest estimate since October of 2008, reports said Wednesday.

Analysts with AAA, Wright Express and Oil Price Information Service said the national average for pump prices has skyrocketed 13 cents from a month ago. They expect filling stations to charge $3.50 a gallon or more by spring of 2011.

Benchmark oil climbed 43 cents to $90.25 in midday trading on the New York Mercantile Exchange as the government reported a shortage of the nation’s crude oil supplies. The Energy Department’s Energy Information Administration announced that crude supplies declined 5.3 million barrels last week compared to the week before. The administration also noted that gasoline supplies increased by more than 2 million barrels.

Stephen Schork, editor of the Schork Report newsletter, says supplies are still fixed at over 10 percent above what they were from 2004 to 2008. “Traders should not be fooled by a big draw from today’s DOE data,” he said, according to The Associated Press.

Also on the Nymex, heating oil gained 0.63 cent to $2.5227 a gallon, gasoline rose 1.11 cents at $2.4096 a gallon and natural gas dropped 3.9 cents at $4.020 per 1,000 cubic feet, AP reported.

Categorized | Cars, Drilling for Oil
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