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Cost of gas on rise again nationally

By Bloomberg News

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Gas prices in Washington state continued to decline, however. The statewide average for a gallon of regular fell 2.6 cents to $1.999 from $2.025 a week earlier, but that remains 39.4 cents more than at the same time a year ago.

Washington's average price peaked at $2.288 on May 24 but has fallen steadily since.

Gas prices within Seattle are sliding, too. The average price for a gallon of regular in the city fell 5.2 cents to $1.992 from $2.044 last week. That was the largest one-week drop among 10 metropolitan areas tracked by the Energy Department.

Prices increased most in the Midwest, gaining 6.3 cents on average to $1.867 a gallon, the department said. Gasoline in lower Atlantic states such as North Carolina rose 2 cents to $1.857. West Coast prices fell 1.2 cents to $2.124, the highest regional average in the country.

Gasoline prices have tracked the crude-oil market, which last week rallied above $40 a barrel after declining in much of June. The cost of crude makes up more than two-fifths of the retail price of gasoline. Crude oil yesterday traded at $39.50 a barrel, up 6.6 percent this month, based on New York futures.

Pump prices for gasoline nationwide have risen 43.9 cents, or 30 percent, this year, and on May 24 reached a record $2.064. Refiners passed along higher crude-oil costs, fuel reserves lagged normal levels, and the strengthening U.S. economy spurred higher demand for fuel, hampering efforts to replenish stocks.

Oil prices have surged this month amid speculation that terrorists will attack oil pipelines and ports in Iraq or at other Middle East petroleum operations. "Should crude-oil prices remain closer to $40 per barrel than to $35 per barrel, retail prices may not drop much further than current levels," the Energy Department said in a report last week. "Retail prices are likely to remain closer to $2 per gallon than $1.50 per gallon for some time to come."

The average U.S. price for diesel fuel rose 2.4 cents to $1.74 a gallon, the second consecutive increase, the Energy Department said. The price, which fell to a 10-week low of $1.70 on June 21, was up 30.5 cents, or 21 percent, from a year ago.

Information from Seattle Times reporter David Bowermaster is included in this report.

Copyright © 2004 The Seattle Times Company

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