High Cost of Crude Drives Up Prices at the Pump The price of crude oil climbed higher into record territory Wednesday, topping $72 a barrel. The high cost of crude oil, along with seasonal refinery outages, is driving up prices at the gas pump. The price of gasoline has already hit the $3-a-gallon mark in some parts of the United States.
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High Cost of Crude Drives Up Prices at the Pump

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High Cost of Crude Drives Up Prices at the Pump

High Cost of Crude Drives Up Prices at the Pump

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RENEE MONTAGNE, host:

In today's business news, the high cost of gas and top executives.

(Soundbite of music)

MONTAGNE: The price of crude oil climbed into record territory yesterday, topping $72 a barrel. The high cost of crude oil, along with seasonal refinery outages, is driving up prices at the gas pump, as NPR's Scott Horsley reports.

SCOTT HORSLEY reporting:

The Energy Department's weekly report on petroleum carried a headline yesterday, "Three Dollars Per Gallon?" with a question mark. That question has already been answered in Los Angeles and some other parts of the country where gasoline prices hit the $3 mark this week.

AAA spokesman Carol Thorpe says L.A.'s average gas price is now even higher than it was in the wake of last year's hurricanes.

Ms. CAROL THORPE (AAA Spokesperson): The bad news is the numbers are going to keep going up. We expect that gasoline in the next few weeks could go, on average, to $3.10, $3.20 a gallon.

HORSLEY: These high prices are coming weeks before the busy summer driving season, but Thorpe says its not longer predictable that gas prices will peak at the same time the thermometer does.

Ms. THORPE: It used to be you could be sure that every holiday that gas prices would go up, every summer gas prices would go up. But what we've seen is gas prices go up at odd times, down on holidays, maybe down in the summer, then up over Labor Day. So it really is dependent on what's happening in the oil markets, what's happening in the world, what's happening to supply.

HORSLEY: What's happening in the world right now has pushed oil prices to an all-time high. That's partly a result of tensions with the big oil producing countries of Iran and Nigeria.

Analyst Phil Flynn, of Alaron Trading in Chicago, doesn't expect much of a break.

Mr. PHIL FLYNN (Senior Analyst, Alaron Trading, Chicago): This market seems to be, you know, on a track to continue to move higher, and there doesn't seem to be anything, you know, in the near term that's going to stop this momentum.

HORSLEY: With the stock market rallying this week, there's no sign of the kind of economic slowdown that might cut in the demand for oil, and drivers are still using more gasoline than they did a year ago, even though it now costs them more than 50 cents a gallon more.

The Energy Department says its not a foregone conclusion that the average price of gasoline nationwide will hit the $3 mark this year. The Department expects many refineries that are now shut down for maintenance will soon begin pumping gas again. That should boost supplies and perhaps lower prices, just in time for Memorial Day.

The Energy Department expects gas prices to remain about 25 cents a gallon higher than they were last year, though. And that's assuming no major disruptions in oil and gas supplies.

Scott Horsley, NPR News.

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