Experts: Gas prices to keep climbing

Gasoline prices have edged upward to an average that's within a hair's breadth of $3 a gallon on Long Island - $2.985, according to a daily survey of stations done for the AAA, and government experts expect them to keep climbing.

They are forecasting an additional 18-cent increase before prices peak in the summer, but some private analysts think that estimate is too conservative.

Thursday's Long Island average is 8.7 cents a gallon higher than a month earlier and almost 82.5 cents a gallon higher than a year earlier. The AAA said the price is the highest since October 2008, when gas prices were falling from that summer's record high of $4.34.

"Average U.S. pump prices likely will exceed $3 per gallon at times during the forthcoming spring and summer driving season," the U.S. Department of Energy said in Wednesday's weekly fuels update. That would be about 18 cents above the current U.S. average for regular, which the department said is $2.826 a gallon.

But that prediction assumes an average crude oil price of $79 a barrel this summer, the department added. Although crude oil for May delivery fell by 49 cents Thursday, it settled at $85.39 a barrel on the New York Mercantile Exchange. Prices had reached $87.09 Tuesday, which Bloomberg said was the highest level since Oct. 9, 2008.

Stephen Schork, editor of The Schork Report, a newsletter published in Villanova, Pa., notes that the government says there is a chance crude oil could reach $110 a barrel this summer.

"It's a long shot, but it's not unthinkable," he said.

That would translate to gasoline at about $3.60 a gallon, he said. Even if crude oil stays in the $85 to $90 range, he said, the 18-cent increase forecast by the government might be 10 cents too low. "We can expect prices to continue to trend higher between now and Fourth of July," Schork said.

Experts attribute to rise in crude prices mostly to investors buying oil in anticipation of a rise in demand as the world economy recovers from recession, and to the decline in value of the U.S. dollar against foreign currencies like the euro, which makes commodities priced in dollars, such as oil, more attractive for investors holding foreign currencies.

Even without that factor, gasoline prices usually rise in the spring as improving weather increases discretionary driving and as refineries temporarily halt operations to switch to cleaner-burning and less evaporative "summer" grade gas, which costs more to produce.

Prices on Long Island

Gallon of gasoline

(average for regular)

Yesterday: $2.985

Week ago: $2.946

Year ago: $2.160

Source: AAA

Gallon of heating oil

(average, full-service dealers)

Monday, March 29*: $3.094

Week before: $3.096

Year earlier: $2.622

*Last date of state survey

Source: New York State Energy Research and Development Authority