Saturday, July 7, 2007

NEW YORK (AP) — Retail gas prices rose overnight yesterday for the first time in more than a month as the closure of a Kansas refinery sent prices in the center of the country sharply higher. Oil futures, meanwhile, rose $1 a barrel to another 10-month high.

The average national price of a gallon of gas inched up 0.3 cent to $2.952, according to AAA and the Oil Price Information Service. Retail prices, which typically lag futures, had fallen steadily since their late May peak of $3.227 a gallon.

Analysts have long argued the slide was due to end and prices were likely to start following futures prices higher. Futures have rallied in recent weeks on concerns about domestic refining capacity.

It’s not clear how much prices will rise. Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, said the overnight increase is almost all attributable to price jumps in Plains and some Rockies states.

Supplies there have been cut by the flooding and closure of a refinery in Coffeyville, Kan., that can produce 2.1 million gallons of gasoline per day.

“They just lost about one-seventh of their gasoline supply for the summer,” Mr. Kloza said.

However, if retail gas prices are destined to follow futures higher, then they’re likely to keep rising. Oil and gas futures rose yesterday on continuing concerns about violence and kidnappings in Nigeria and a sense that domestic refiners are struggling to produce enough gas.

Light, sweet crude for August delivery gained $1 to settle at $72.81 a barrel on the New York Mercantile Exchange. That was the front-month contract’s highest settlement since Aug. 15. August Brent crude rose 87 cents to $75.62 a barrel on the ICE Futures exchange in London.

August gasoline rose 2.53 cents to settle at $2.3096 on the Nymex.

Nymex heating oil futures rose 0.78 cent to $2.0951 a gallon, while natural gas prices fell 17.4 cents to settle at $6.444 per 1,000 cubic feet. The government reported that natural gas inventories rose by 78 billion cubic feet last week, in line with analyst expectations.

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