Prices at the pump taking a breather

DIRK LAMMERS Comments 0
Published: November 3, 2009
Modified: November 4, 2009 at 6:11 am

Gasoline's post-summer ascent leveled off over the weekend, just as consumers begin to decide whether the money they pour into their tanks will force them to cut back on holiday spending.

Retail gas prices have jumped about 23 cents since the beginning of October, reaching a new high for the year on Friday.

The average price for a gallon of regular unleaded fell two-tenths of a cent overnight to $2.691, according to auto club AAA, Wright Express and Oil Price Information Service.

That's a big change from the fall of 2008, when plummeting prices offered one of the few breaks for consumers as thousands lost jobs and businesses shut down. Gas in 2008 dropped from around $3.62 a gallon in the beginning of October to $2.44 at this time last year.

The Energy Information Administration in its weekly update released Monday put the national average for unleaded regular at $2.694 per gallon, a 2-cent jump from the previous week, marking the fifth straight advance.

Benchmark crude for December delivery rose $1.13 to settle at $78.13 on the New York Mercantile Exchange after shedding $2.87 on Friday to settle at $77.

The Institute for Supply Management, a trade group of purchasing executives, said Monday that U.S. manufacturing activity grew in October at the fastest pace in more than three years, helped by government spending and higher demand from overseas.

The strong report raised hopes that energy demand, which has been hampered by the recession, may be rebounding. Yet the dollar keeps falling, which has helped push oil prices higher as well.

Dollar-based oil can look like a bargain for investors holding stronger currencies.

Also Monday, the Commerce Department reported Monday that September construction spending posted a better-than-expected performance, powered by the largest jump in housing construction in more than six years.

And the National Association of Realtors said that the volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.

Oil also received a boost from strong economic data out of China.

In other Nymex trading, heating oil gained 4.08 cents to settle at $2.046 a gallon. Gasoline for December delivery gained 3.07 cents to settle at $1.9903 a gallon. Natural gas for December delivery fell 22.1 cents to settle at $4.824 per 1,000 cubic feet.

In London, Brent crude for December delivery gained $1.35 to settle at $76.55 on the ICE Futures exchange.

___

Associated Press Writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.