Gas prices back at $3 a gallon

NEW YORK – Gas prices rose back to $3 a gallon at the pump Friday, following rising oil futures on concerns about tight inventories and potential supply disruptions.

Retail gas prices, which typically lag the futures market, are widely expected to rise to new record highs in the spring. Analysts think futures investors are anticipating big gains by buying now, driving futures


“They’re all jumping on the gasoline bandwagon,” said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, who predicts pump prices will peak between $3.50 and $3.75 a gallon in the spring. The Energy Information Administration recently predicted prices will peak above $3.40 a gallon.

Kloza thinks gas prices will rise because refiners will again struggle to increase supplies in advance of peak summer driving season, raising concerns that there won’t be enough to meet demand. Last May, prices hit all-time record of $3.227 a gallon, amid a spate of unexpected refinery outages that kept supplies from growing as fast as many investors and analysts believed was necessary.

AP