NEW YORK (AP) — Crude futures rose past $115 Wednesday for the first time, propelled by concerns about how much gas will be available during the peak summer months.
In its weekly inventory report, the Energy Department’s Energy Information Administration said inventories of gas fell by 5.5 million barrels, much more than analysts surveyed by Dow Jones Newswires had expected. Light, sweet crude for May delivery responded by rising as high as $115.07 on the New York Mercantile Exchange, and later was up $1.15 at $114.94 a barrel.
The report said crude inventories fell by 2.3 million barrels last week, compared to the gain analysts expected.
But the market was torn and traded sharply lower at times by data deeper in the report showing that the country’s appetite for increasingly expensive gas is declining.
“Demand for gasoline is terrible,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. Gas demand has fallen an average of 1 percent each of the last four weeks compared to the same period last year. “Demand should be rising this time of year.”
Still, May gasoline futures rose 5.8 cents to settle at a record $2.939 a gallon on the Nymex after earlier rising to a trading record of $2.9427.
The EIA report also said inventories of distillates, which include heating oil and diesel, unexpectedly rose last week by about 100,000 barrels. Analysts had expected a sharp decline. May heating oil futures rose 0.91 cent to settle at $3.283 a gallon.
Demand for gasoline has been falling for months as consumers reacted to a series of price records by driving less. The national average price of a gallon of regular unleaded gas rose 1.3 cents Wednesday to a record $3.399 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. That’s 53 cents higher than a year ago, and is expected to keep climbing along with futures prices and as the summer driving season draws near.
The average national price of a gallon of diesel, meanwhile, rose a cent to a record $4.129 a gallon, the survey showed. High prices for diesel — used to fuel most trucks, trains and ships — is a large part of the reason food prices are rising.
Gas and diesel prices are following crude futures, which have risen from about $64 a barrel last spring, mostly because of the falling dollar. Prices also have been supported in recent months by a view that demand for oil remains strong globally, although it may be falling in the United States. But that could change, if U.S. demand continues to weaken, analysts say.
“We’re seeing a major slowdown in U.S. demand growth,” Flynn said.
Still, analysts expect gas prices to rise higher before they fall. Many see retail prices peaking around $3.65 a gallon next month. The Energy Department, in a recent forecast, said prices could average as high as $3.60 a gallon this summer on a monthly basis, but could spike to $4 on a national average basis at times.
In other Nymex trading, May natural gas futures rose 22.8 cents to settle at $10.433 per 1,000 cubic feet.
In London, June Brent crude futures rose $1.08 to settle at $112.66 a barrel on the ICE Futures exchange.