AP - Consumers for the first time this year are paying more on average for a gallon of gasoline than they did 12 months ago, according to data released Tuesday.
There is a good chance that this week, retail gasoline will surpass peak summer prices reached just over four months ago.
Refiners are cutting back on production now because the cost of the crude that they convert to fuel has been rising fast, but demand for fuel from businesses and consumers remains relatively weak.
Valero, the country's largest independent petroleum refiner, said Tuesday that it lost nearly $500 million over the past three months.
Crude futures rose again Tuesday and for the 14th straight day, so did retail gasoline prices.
A gallon of gas climbed 0.4 cents higher overnight to $2.675 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Prices a year ago were $2.668 a gallon.
At this time last year, however, gasoline prices were falling fast as the financial crisis on Wall Street spread to Main Street.
That means the gap figures to get wider. By December 2008, pump prices had tumbled all the way to $1.61. Just six months before, prices hit a record $4.11 which had millions of motorists cutting back on driving.
This year it's refiners cutting back. The amount of gasoline held in storage has fallen by about 7.5 million barrels in just two weeks. Most energy experts believe that trend will play out again when the government reports gasoline inventory levels on Wednesday.
Right now, American motorists are paying about $1 billion a day for gasoline. By the end of the year, they will collectively pay about $250 million more per day for gasoline than they did a year ago, according to Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Most of the increase will not come from higher prices, but because of the plunge in prices a year ago.
Gasoline prices loosely follow the price of crude, and crude prices have skyrocketed largely because of the falling dollar. The dollar has lost more than 15 percent of its value since March.
Because crude is bought and sold with dollars, investors who hold euros or other currencies that have strengthened against the dollar can essentially buy more crude with less.
Benchmark crude for December delivery rose 87 cents to settle at $79.55 a barrel on the New York Mercantile Exchange.
In other Nymex trading, heating oil rose 1.88 cents to $2.0523 a gallon. Gasoline for November delivery advanced 3.12 cents to $2.0650 a gallon, while natural gas for November delivery rose 4.2 cents to $4.55 per 1,000 cubic feet.
In London, Brent crude for December delivery settled unchanged at $77.26 on the ICE Futures exchange.
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