Gas prices surge past $3.40 a gallon, expected to rise [View All]

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from AP, via Yahoo!:



By JOHN WILEN, AP Business Writer
1 hour, 18 minutes ago



NEW YORK - Retail gas prices pushed past a record high $3.40 a gallon Thursday, fulfilling expectations that they'll keep climbing toward $4 as the summer driving season approaches.

Oil prices, meanwhile, fell slightly after setting yet another record high overnight. Analysts said investors were locking in gains from crude's ongoing rally.

At the pump, the average national price of a gallon of unleaded gas rose 1.9 cents overnight to $3.418 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel fuel also hit a new record of $4.146 a gallon after jumping 1.7 cents overnight, the survey said.

The soaring cost of both fuels is pressuring consumers, who gas up their cars and buy goods that grow more expensive because of rising transportation costs. And their plight will only worsen; many analysts expect average national gas prices to peak close to $4 a gallon later in the spring. Prices are already that high in some parts of the country, including California.

With gas reaching another milestone, analysts are questioning whether consumers, who have already curtailed their driving over the past month, will cut back further in response to rising prices. They point to the trends seen last year in California; when prices soared past $3.40 a gallon in the state last November, demand plummeted by 3.7 percent.

Some analysts see California's experience as a sign that a plunge in national demand could also occur. Still, when summer arrives, demand will rise regardless of how high prices have soared.

"July and August will be very busy," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J. "If you've got a vacation planned to Disney World or something, you're still going to take the vacation." ......(more)

The complete piece is at: http://news.yahoo.com/s/ap/20080417/ap_on_bi_ge/oil_prices