Business

Pump prices on pace to top 2009 high by weekend

The cost of filling up the car is rising in the wake of soaring crude, and, by this weekend, pump prices might race past the highs for all of 2009.

Tracing the ascension of crude, up 14 percent since mid-December, energy prices across the board are catching up.

It's part economic and part meteorological.

Vicious pockets of cold stretch from the Northeast to the South, where farmers in the Florida panhandle are trying to save tomato and strawberry crops. Four deaths in Tennessee have been blamed on low temperatures.

The frigid blast has squeezed heating oil supplies in some areas during a year when demand had been very weak.

Falling supplies in recent weeks have contributed to prices driven higher by the falling dollar. When the dollar falls, investors holding stronger currency can essentially buy more dollar-based crude, and they have, doubling oil prices last year.

Look at what happened just on Monday:

- Crude prices closed at $81.51 a barrel, the highest settlement price on the New York Mercantile Exchange since Oct. 9, 2008.

- Heating oil futures settled at $2.1905, well beyond the highest prices of 2009

- Gasoline futures hit $2.1044, the highest closing since Oct. 3, 2008.

By the weekend, a gallon of gas will hit $2.70, higher than the peak for 2009, and will be pushing $3 by spring, predicted OPIS' Tom Kloza.

One of the breaks consumers got in 2009 was cheap energy. It's too soon to tell if the rising prices right now are setting the trend for 2010, though Peter Beutel of Cameron Hanover called sharply higher heating oil prices an "ominous sign for the year ahead."

Pump prices rose less than a penny overnight to $2.667 a gallon Tuesday, according to auto club AAA, Wright Express and Oil Price Information Services.

"Some back-of-the-envelope arithmetic puts the current U.S. fuel bill at about $1.066 billion each day," Kloza wrote. "A year ago, that daily outlay was about $625 million."

Already, gas costs $1 more a gallon than a year ago, and that's costing a typical motorist about $50 more a month.

Heating oil, diesel and gasoline are all following crude.

A barrel of oil came within a penny of matching the high for last year early on Tuesday, before giving up early gains.

Benchmark crude for February delivery rose 26 cents to settle at $81.77 a barrel on Nymex.

  Comments