With Thanksgiving just around the corner, the price of gasoline is marching toward the high of the year.
The national average for a gallon of unleaded regular gasoline on Monday was just 3 cents shy $2.92 a gallon, the high back in May. Analysts expect more upward price creep before the long holiday weekend starts next Wednesday.
There’s no expectation of a holiday driving frenzy. Instead, gas is tracking the price of oil. Crude has risen 15 percent since Labor Day, as investors worried about a weaker U.S. currency have parked their money in commodities like oil.
Gas prices have risen about 8 percent since Labor Day, a period when gasoline demand falls off because summer vacations have come and gone.
The national average for a gallon of unleaded regular gasoline was $2.892 Monday, according to AAA, Wright Express and Oil Price Information Service. That was about 6 cents more than a month ago and nearly 26 cents more than a year ago.
“Fundamentally, we shouldn’t see prices that high,” said Fred Rozell, retail pricing director at Oil Price Information Service in Wall, N.J.
Rozell said the national average “may flirt” with $3 a gallon before year’s end. PFGBest analyst Phil Flynn was more cautious, calling $3 possible but not inevitable.
Many Americans already are paying $3 a gallon or more. For example, drivers in California, Oregon, Hawaii, Washington, Illinois and New York are seeing prices in a range between $2.981 a gallon and $3.524 a gallon.
In Los Angeles, the retail price was $3.155 cents a gallon, up about 4 cents from a week ago. Chicago-area drivers paid an average of $3.11 a gallon, an increase of a penny from a week ago. Detroit had a 2 cent drop, but drivers there are still paying $3 a gallon.
The lowest average prices were found in Colorado, Texas and parts of the South.
Meanwhile, oil prices rose after a report said U.S. retail sales rose for the fourth consecutive month, buoyed by stronger demand in the automobile market.
The Commerce Department said consumer spending rose 1.2 percent, which was nearly double what analysts were expecting.
October sales at auto dealerships increased 5 percent. Excluding autos, sales advanced at a more moderate 0.4 percent in October following a 0.5 percent rise in sales excluding autos in September.
Yet, economists don’t expect consumers to significantly boost spending while unemployment remains high.
Still, oil traders were encouraged by the report, after crude fell Friday on concerns that China would take steps to cool its economic growth.
“The market is going to take a wait-and-see position. I think people think they maybe overreacted to it a little bit on Friday and they’re creeping back into the market,” Flynn said.
Christof Ruhl, the chief economist at BP PLC, expects oil prices to hover around $80 a barrel in 2011. He said there might be “a little upward shift if the economy continues to grow,” though the sustainability of China’s economic growth was a key risk.
Benchmark oil for December delivery gained 31 cents to $85.19 a barrel in trading on the New York Mercantile Exchange.
In other early Nymex trading in December contracts, heating oil added 1.10 cent to $2.3742 a gallon, gasoline rose 2.32 cents to $2.2331 a gallon and natural gas lost 2.9 cents to $3.773 per 1,000 cubic feet.
In London, Brent crude rose 59 cents to $86.93 a barrel on the ICE Futures exchange.
