Gas prices already closing in on last year's high
NEW YORK—The price of gasoline is less than a dime away from last year's high.
Gas reached a nationwide average of $3.90 per gallon on Monday. It has risen 17 cents so far this month. Pump prices are expected to keep rising in the weeks before Memorial Day weekend -- the traditional kickoff of the summer driving season.
The national average peaked last year in early May at $3.98 per gallon. The record high of $4.11 was set in July 2008.
Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, expects that at the very least "we're going to get very close to the record." He said prices could keep climbing through June if a potential Sunoco refinery closure in Philadelphia significantly tightens East Coast supplies of gasoline.
The price of gasoline has tracked the price of crude oil. Benchmark U.S. crude has gone up 8 percent already in 2012. Oil rose 16 cents Monday to $107.03 per barrel in New York. Brent crude, which is used to price oil imported by U.S. refineries, added 52 cents to finish at $125.65 per barrel in London.
Oil has risen this year as Western nations confront Iran over its nuclear program. They fear that Iran is building a weapon, though it denies the claim. Western leaders are trying to cut off Iran's oil revenues through an embargo and a variety of other sanctions in hope of forcing it to negotiate.
Iran is the world's third-largest oil exporter. Oil traders say that concerns about a prolonged standoff, and reduced Iranian exports, has added about $15 to $17 per barrel to the price of oil.
Representatives from the U.S. and five other nations are expected to meet with Iran in April for a new round of talks about its nuclear program, diplomats told The Associated Press. The country turned away international inspectors in February.
Meanwhile, natural gas futures hit a new 10-year low, giving up 4.9 cents to end the day at $2.226 per 1,000 cubic feet.
Natural gas has plummeted this year due to a recent production boom and unseasonably warm temperatures. Analysts say that U.S. has so much gas that storage facilities may run out of space.
"If there isn't any place to put it, then (producers) are going to be burning it off instead," PFGBest analyst Phil Flynn said.
In other energy trading, heating oil added 1.87 cents to finish at $3.2288 per gallon and gasoline futures increased by 3.14 cents to end at $3.4166 per gallon.
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