Gasoline To Hit Labor Day Record Price
August 29, 2012
Hurricane Isaac and a deadly blast at Venezuela's Amuay refinery pushed gasoline to an almost four- month high and threatened to revive a debate about energy costs in the run-up to the presidential election in November.
Futures jumped yesterday in New York as Isaac forced closures of Gulf Coast refineries and reduced rates at others. That market is also reeling from an Aug. 25 explosion in Venezuela that killed at least 48 people and closed the country's largest fuel-making plant. Futures are up 23 percent since their 2012 settlement low of $2.5501 a gallon on June 21.
Prices at the pump will be the highest ever for the U.S. Labor Day holiday, AAA said yesterday. The surge reignites an issue that has pitted President Barack Obama, who has called for the elimination of billions of dollars of subsidies enjoyed by the oil and gas industry, against the presumptive Republican nominee Mitt Romney. It also spurs speculation that Obama will release supplies from the Strategic Petroleum Reserve to ease prices for consumers.
"Given this administration's belligerent rhetoric against the oil industry, it's going to be very easy for Romney to pin the blame on Obama," said Stephen Schork, president of Schork Group Inc., a consulting firm in Villanova, Pennsylvania. "The White House will be on the defensive. It makes an SPR release likely sooner rather than later."
Gasoline for September delivery advanced 7.68 cents, or 2.5 percent, to $3.1548 a gallon yesterday on the New York Mercantile Exchange, the highest level since April 30. Futures fell 2.87 cents, or 0.9 percent, to settle at $3.1261 today.
Retail Prices
Retail prices for regular grade increased 0.6 cent to $3.756 a gallon yesterday, the highest level since May 7, according to AAA, the largest U.S. motoring group. Gasoline at the pump cost $4.138 in California yesterday, $4.008 in Connecticut and $3.973 in New York.
The nationwide average fuel cost rose to $3.75 a gallon on Aug. 26, the highest price ever for that day, Michael Green, a spokesman for AAA in Washington, said in an e-mail.
"We expect the national average price of gasoline for Labor Day this year to be the highest ever for the holiday," he said.
Drivers could be paying $4 a gallon by the end of September, Schork said. The first presidential debate is scheduled for Oct. 3.
FINISH
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