Harsh winter weather and the rise in crude oil prices are dragging gasoline prices upward along with those for heating oil, despite higher gasoline inventories and lowered demand.
Experts like Linda Rafield, senior analyst at Platts, a petroleum information company in Manhattan, said gasoline pump prices likely are headed higher.
"Right now the primary driver is really natural gas and heating oil," she said Wednesday. "Gasoline probably will move up in tandem with the winter fuels market."
She said she thinks pump prices will moderate and perhaps decline in February, when demand for heating fuels usually begins to wane.
Peter Beutel, an energy consultant and president of Cameron Hanover Inc. in New Canaan, Conn., said he thinks motorists can expect to see pump prices rise by another 25 cents a gallon in coming weeks, based on wholesale price increases in the past month.
"We're looking at heating oil and gasoline prices higher than they have been since October of 2008," he said. "Not good news."
Regular gasoline averaged $2.894 on Long Island Wednesday, the AAA said, up 4 cents a gallon from the previous week and up 58 percent from a year earlier. Regular has averaged as high as $4.346 on Long Island in the AAA survey - on July 8, 2008, the same month that crude oil soared past $147 a barrel.
The simple fundamentals of supply and demand, said Rafield, do not justify current pump price increases. Statistics released Wednesday by the U.S. Department of Energy showed demand for gasoline nationally last week at only 8.74 million barrels a day, down 3.7 percent from the week prior and down 2.8 percent from a year earlier. Rafield credits recent snow and the nation's high unemployment rate for the declines.
Meanwhile, gasoline supplies rose, the energy department said, to a national total of 219.7 million barrels at the end of last week, up 1.7 percent from the prior week and up 3.9 percent from a year earlier.
Crude oil, the major component of gasoline and heating oil, has been increasing steadily in price for the past year, with the continued migration of investor dollars from stocks and bonds to commodities such as oil, partly as a result of the dollar's decline in value against major foreign currencies. Oil is priced in dollars, and the steady decline in the currency's value has made oil a more attractive investment for investors holding euros or other foreign currencies.
Wednesday, crude oil futures settled up $1.41 at $83.18 on the New York Mercantile Exchange, the highest close since Oct. 9, 2008.
Heating oil prices have risen by 14.5 cents a gallon on Long Island since Dec. 14 and could go 10 to 15 cents a gallon higher in coming weeks, by some estimates, unless crude oil prices drop or the forecasts for more harsh weather prove wrong.
Heating oil at full-service dealers on Long Island averaged $3.056 a gallon Monday, up from $2.911 on Dec. 14 and up 32.8 cents from a year earlier, according to the state Energy Research and Development Authority. That's the highest retail average here in more than a year.
Wednesday, Sen. Charles Schumer (D-N.Y.) urged the Obama administration to release $590 million in emergency funding under the Low Income Home Energy Assistance Program, known as LIHEAP. "Families should not have to decide between necessities and heating their homes," Schumer said in a statement.