Gas Prices Set Another Record

Director Tom Shadyac, left, poses with actors Kevin James and Wanda Sykes at the party after the premiere of Universal Pictures' "Evan Almighty" at the Gibson Amphitheatre and CityWalk Cinemas on June 10, 2007, in Universal City, Calif.
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Gas prices have hit a record high of $2.31 a gallon, pushed up by the climbing cost of oil and strong demand in the midst of the summer vacation season, an industry analyst said Sunday.

"Unadjusted for inflation, this is another record high price, beating the previous high price of three months ago," Trilby Lundberg, who publishes the semimonthly Lundberg Survey of 8,000 gas stations around the country, told CBS Radio News.

"Gasoline prices surged up nearly a dime in the past two weeks, self-serve regular, mid-grade and premium, all up about nine-and-a-half to ten cents," she said.

According to the survey, self-serve regular averaged $2.31 a gallon nationwide, up from $2.21 on June 24. Midgrade averaged $2.40, with premium-grade hitting $2.50.

Lundberg cited two reasons for the 9.6-cent-a-gallon average increase, "record-high crude oil prices, which have remained around $60 a barrel for the past three weeks, and the other is the record demand for gasoline, even at these prices."

And the prices could go even higher, even though oil prices slipped more than $1 a barrel Monday after Hurricane Dennis missed key Gulf of Mexico refineries and spared the market from a sudden disruption in supply at a time of high demand.

Traders had feared a repeat of last year's Hurricane Ivan, which damaged oil platforms and caused months of lost production in the Gulf of Mexico. But the region's oil facilities, the source of 30 percent of U.S. output, weathered Hurricane Dennis largely unscathed.

"The market will continue to expand last Friday's sell-off given that there's minimal damage caused by the hurricane," said analyst Victor Shum of Texas-based energy consultants Purvin & Gertz in Singapore.

"Right now, the lowest self-serve regular average in our survey is Charleston, S.C., $2.09 for self-serve regular, and the highest is San Diego, Calif., at $2.55," said Lundberg.

The $2.31 mark is well below the inflation-adjusted high — $3.03 a gallon, in March 1981.

Lundberg noted that demand for gasoline was up 2.5 percent compared to last June, despite the jump in prices. A stronger economy, she said, made the price "more absorbable" for consumers.