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Gas hits high for the year

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The Associated Press

Published: October 31, 2009

Retail gasoline prices chugged higher Friday to a new peak for the year, forcing consumers to dig deeper into already-thin wallets to pay for fuel.

The worst part: Supplies of oil and gas are plentiful. In fact, storage points for gas are so jammed that producers are running out of places to put it, and crude supplies are well above average levels.

Gasoline prices are now up 17 straight days after climbing 0.4 cents overnight to $2.695 a gallon, according to auto club AAA, Wright Express and Oil Price Information Services. That is the highest price since Oct. 26, 2008. The average for a gallon of unleaded regular in Tampa was $2.692 Friday.

The average retail price for gas was $1.686 a gallon in December. Today's price will tack about $50 a month on to the monthly gas cost for the typical customer compared with last December. It comes at a time when unemployment is at a 26-year high.

"It's a wet blanket on the consumer. It's something visible you see," said economist Ken Mayland of ClearView Economics.

The reason for the increase at the pump is because oil prices have been on the rise, going from $65 a barrel as recently as August to $82 last week. A $17-per-barrel increase is worth about 40 cents a gallon.

A weakened dollar and signs that the economy is improving have moved oil prices higher. The Commerce Department said Thursday that the U.S. economy grew at a 3.5 percent annual pace in the third quarter, the best showing in two years and breaking four straight quarters of declines.

The dollar rose on Friday, and crude fell sharply. There was also a dour consumer spending report.

Benchmark crude for December delivery fell $2.87 to settle at $77 a barrel on the New York Mercantile Exchange.

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