Gas prices, oil futures up sharply

Retail gasoline prices increased sharply again over the last week, while oil futures rose to the highest close since November.

The average price of a gallon of regular gasoline in California jumped 11.9 cents to $2.756 a gallon, according to the Energy Department’s weekly survey of filling stations. That was the nation’s biggest rise, ahead of the Midwest’s 11.7-cent climb to $2.585 a gallon, helping drive the national average up 8.9 cents to $2.524 a gallon.

Gasoline prices have soared because of rising oil costs and lower refinery production; refineries have been running at less than full capacity because of scheduled maintenance and unexpected problems.

But Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University, said gasoline prices were “either at or nearing their peak” because demand numbers weren’t strong.

Tom Kloza, chief oil analyst for the Oil Price Information Service in Wall, N.J., said the rate of increase so far this year was unprecedented, up nearly 55% since New Year’s Day. Some states, including Indiana, Michigan, Illinois and Montana, have experienced price increases of $1 or more.

Crude oil for July delivery climbed $2.27 to $68.58 a barrel, the highest since Nov. 4, on stronger-than-expected manufacturing numbers in China. Some saw oil rising as high as $87 but warned that fundamentals were weak.

“This increase is purely technical and speculative,” said Sean Brodrick of Weiss Research’s online newsletter Money and Markets. “There are no supply-and-demand fundamentals at work here. When it corrects, it’s going to be a free fall off a cliff.”

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