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Retail Gas Averages $3.50 Monday

April 21, 2008

NEW YORK --- Retail gas prices reached another new milestone Monday, April 21, averaging $3.50 a gallon, according to AAA and the Oil Price Information Service. Moreover, crude oil prices rose above $117 a barrel following an attack on a Japanese oil tanker in the Middle East, the Associated Press reported.

Retail diesel prices also reached a record high of $4.20 a gallon --- more bad news for truckers and other shippers already struggling to turn a profit in the face of sky-high fuel costs.

Gas and diesel prices are expected to continue their climb, in light of rising crude prices. The worst may be still to come, the AP reported, because the summer driving season, when demand is at its peak, is just around the corner. 

"It's uncharted territory. People look at the prices and think they're being taken advantage of," Tom Kloza of the Oil Price Information Service told the AP. "I don't think we're done, but I have to believe we're in the eighth or ninth inning" of price increases.

Retail gas prices jumped more than a nickel over the weekend nationwide. They are up 23 percent from a year earlier. Drivers are paying the lowest prices in New Jersey and the most in California, where a gallon of regular is now averaging $3.86 for a gallon, AP reported.

Meanwhile, light, sweet crude for May delivery rose to a record $117.60 a barrel on the New York Mercantile Exchange, but declined to $116.09, down 60 cents from Friday's close.

Crude prices came under added pressure Monday after the 150,000-ton tanker Takayama was struck off the coast of Yemen on its way to Saudi Arabia, its Japanese operator reported on its website. None of the ship's 23 crew members was injured. However, several hundreds of gallons of fuel leaked before a 1-inch hole in the tanker's stern was repaired.

Kyodo News agency reported that a rocket launcher from a small boat fired on the Japanese tanker.

"There's clearly some geopolitical tension in the market," Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia, told the AP. "This will die down, but the market is pretty jittery at the moment."

To make matters worse, the main militant group in Nigeria's restive south claimed it had launched two more attacks on oil pipelines in the region. The AP reported there was no immediate confirmation.

On Friday, oil prices reached $117 for the first time after an attack on a Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta. Shell confirmed a pipeline leak that appeared to have been caused by explosives. The company said it had isolated the line for repairs and that a small quantity of production had been shut.

Since early 2006, attacks on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output.

Also over the weekend, Iran President Mahmoud Ahmadinejad was quoted as saying crude oil prices at $115 a barrel are too low, and that oil must "discover its real value." The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday.


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