Skyrocketing crude oil costs are pushing up prices at the pump in Utah and nationwide, according to a new survey.
AAA Utah reported Tuesday that the average price of regular, unleaded gasoline is up 5 cents from last month at $1.93 per gallon in the state. That's 25 cents higher than the average price at this time last year.
Meanwhile, AAA said the national average price rose 13 cents from last month and 41 cents from last year to hit $1.97 per gallon. In a separate report, the U.S. Energy Department said Tuesday that the average U.S. retail price for regular-grade gasoline rose 5.5 cents in the past week to $1.993 a gallon.
"While labor strife in Nigeria has typically had little effect on the price of crude, it is playing a greater role because of the shortage of the low sulfur oil it produces," said Rolayne Fairclough, AAA Utah spokeswoman, in a prepared statement. "This light, sweet crude is desired by refineries to meet environmental low sulfur standards."
Light sweet crude for November delivery sank $1.13 to $52.51 per barrel on the New York Mercantile Exchange Tuesday after rising as high as $54.45 earlier in the day. Nymex oil futures settled Monday at a record $53.64 per barrel.
"You can't go up every day. Eventually you have to have some kind of correction," said Tom Bentz, a trader at BNP Paribas Futures in New York.
Even with Tuesday's decline, crude futures are up nearly 20 percent over the past month, in large part because petroleum production
in the Gulf of Mexico remains hindered by hurricane damage to pipelines and production platforms. Roughly 19 million barrels of crude, or 3 percent of annual production in the region, has been lost since Hurricane Ivan passed through last month, and daily output is 471,000 barrels below normal.
Because Gulf of Mexico crude tends to have a low-sulfur content it is particularly desirable for refiners, analysts said, making its absence all the more troubling.
"We're definitely in a challenged position right now with that very valuable product off the market," said John Kilduff, senior analyst at Fimat USA in New York.
Such pressures have led to gas price increases in the last month in all but one of the Utah cities monitored by AAA. That lucky one was St. George, which had its average price remain stable at $1.97 per gallon.
However, Logan motorists saw their average gas price go up 8 cents to $1.96 per gallon, while those in Salt Lake and Ogden both faced 6-cent increases, to $1.87 and $1.90, respectively. Provo's average price rose 3 cents to $1.87, AAA said.
AAA Utah surveys a limited number of communities across the state in its monthly gasoline price survey, and the resulting figures are averages. Individual service stations sell gas at both higher and lower prices, sometimes even in the same city block.
And even the largest local increases pale in comparison to those faced by drivers in California, who saw the average price rise 25 cents in the last month to $2.34 per gallon. Nevada's average rose 16 cents to $2.21 per gallon, while Arizona's price rose 14 cents to $2.07 and Colorado's rose 10 cents to $1.96.
Wyoming's price increased just 6 cents to $1.91 per gallon, while Idaho's rose 4 cents to $2.
The Energy Department releases its weekly oil-supply report Thursday, and analysts expect to see the nation's inventory of crude show growth of about 1 million to 2 million barrels. But that's probably not enough to cause another sharp drop in prices, Kilduff said.
On the other hand, "for us to get to $60 a barrel or above is going to take a new catalyst," Kilduff added.
While oil prices are more than 60 percent higher than a year ago, they are still more than $27 below the peak inflation-adjusted price reached in 1981.
Contributing: Bloomberg News