Gasoline increased by a penny a gallon on Long Island in the past week, and might rise further following an increase in crude oil prices on optimism that the "fiscal cliff" has been averted.
The price of regular gasoline averaged $3.772 a gallon in Nassau and Suffolk counties Wednesday morning, the AAA said, up from a week earlier on demand for gas from holiday travelers and rising oil prices.
Gas was down 39.6 cents a gallon Wednesday from the recent peak of $4.168 on Nov. 11, when motorists waited in long lines because of the shortage created by superstorm Sandy. Gas was up 21.2 cents from a year earlier.
Crude oil futures prices have risen from a recent low of $85.56 a barrel on Dec. 10 to $93.12 Wednesday on the New York Mercantile Exchange.
"The main piece of any increase in gasoline prices in recent days is crude," said senior analyst Chris Barber of Energy Security Analysis Inc., a consulting firm in Wakefield, Mass.
Analysts said crude prices rose even before the deal was reached on New Year's Day, as traders expected the Obama administration and House Republicans would reach a deal to avert a fall off the federal fiscal cliff. Falling off the cliff could have triggered a new recession, many economists said, which would hurt demand for oil and gas.
Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc, said traders are betting on improved consumer sentiment from the deal, which spares most Americans from sharp income tax hikes that would otherwise have occurred.
But Lipow and Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Conn., expect the rise in gas prices will be limited. They cite an increase in Social Security payroll taxes that the cliff deal allows, amounting to about $1,000 for a family earning $50,000 a year. Other factors limiting a price rise include seasonally weak January gasoline demand, and continued uncertainty about the economy and the continuing budget process. McGillian said he believes crude will struggle to go above $95 a barrel.
Home heating oil, meanwhile, averaged $4.233 a gallon on Dec. 24 at full-service dealers on Long Island, the state Energy Research and Development Authority said. That average, the latest available from the state, was down 8.3 cents from the recent peak on Nov. 26, but almost 27 cents a gallon higher than a year earlier.
Average prices of gasoline and heating oil on Long island
Price per gallon Wednesday: $3.772
Month ago: $3.919
Year ago: $3.560
HOME HEATING OIL
Price per gallon Dec. 24: $4.233
Month earlier (Nov. 26): $4.301
Year Earlier: $4.008