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U.S. gasoline prices hit $2.50 a gallon

The average retail price of a gallon of gasoline in the United States rose over the past three weeks to record highs, but prices may soon stabilize as the summer driving season winds down, an industry analyst said on Sunday.
/ Source: Reuters

The average retail price of a gallon of gasoline in the United States rose over the past three weeks to record highs, but prices may soon stabilize as the summer driving season winds down, an industry analyst said on Sunday.

The national average for self-serve, regular unleaded gas was nearly $2.5011 a gallon on Aug. 12, up about 20 cents per gallon in the past three weeks, according to the nationwide Lundberg survey of about 7,000 filling stations.

At that price, gasoline touched its third record-high this year, unadjusted for inflation. The previous record-high was $2.3068 a gallon, on July 8.

The 20-cent jump was nearly identical to the rise in crude oil prices last week. U.S. crude for September delivery closed at an all-time high $66.86 a barrel on Friday. Prices could stabilize, or even fall, as demand for gas tends to decrease in the United States after August, Trilby Lundberg said.

On a long-term basis, oil prices are peaking just above current levels, which means traders do not expect prices to go significantly higher, Lundberg said.   

“Long-term futures indicate that the futures market does not expect a supply problem ... and it is the world demand for crude that has raised the value of a barrel,” she added.

Contracts for crude delivery in February 2006 closed at $67.69 on Friday — less than $1 above the current high.

Lundberg did not rule out oil as high as $75 a barrel. She said it did not seem realistic, notwithstanding special circumstances such as a hurricane or political trouble in the Middle East that would disrupt supply.

At $2.76 a gallon, on average, San Diego, California, had the highest average price for self-serve, regular unleaded gasoline of the stations surveyed, while the lowest price was $2.31 a gallon in Cheyenne, Wyo.