- The Washington Times - Monday, April 21, 2008

NEW YORK (AP) — Retail gas prices hit another new milestone today, jumping to an average $3.50 a gallon at filling stations across the country. Crude oil prices, meanwhile, set new records of their own, spiking above $117 a barrel after an attack on a Japanese oil tanker in the Middle East. Diesel prices at the pump also struck a record high of $4.20 a gallon, according to AAA and the Oil Price Information Service, putting pressure on truckers and other shippers who rely on the fuel to transport goods to market. Gas and diesel are expected to keep climbing as they trace the path of crude, which has surged to new records for six trading sessions in a row. And the worst may be still to come: The summer driving season, when demand is at its greatest, has yet to begin. “It’s uncharted territory. People look at the prices and think they’re being taken advantage of,” said Tom Kloza of the Oil Price Information Service, Wall, N.J. “I don’t think we’re done, but I have to believe we’re in the eighth or ninth inning” of price increases. Gas prices at the pump jumped more than a nickel over the weekend nationwide, and are up 23 percent from a year earlier. Drivers are paying the lowest prices in New Jersey and the most in California, where a gallon of regular is now averaging $3.86 for a gallon. Crude prices are rising along with a host of commodities, from corn and wheat to gold and platinum. Light, sweet crude for May delivery rose to a record $117.60 a barrel on the New York Mercantile Exchange but fell back to $116.09, down 60 cents from Friday’s close. Crude prices came under increased pressure today after the 150,000-ton tanker Takayama was struck off the coast of Yemen as it headed for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said in a statement posted on its Web site. None of the ship’s 23 crew members was injured, but several hundreds of gallons of fuel leaked before a 1-inch hole in the tanker’s stern was repaired, the company said. Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat. “There’s clearly some geopolitical tension in the market,” said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia. “This will die down, but the market is pretty jittery at the moment. Adding to the worries were claims Monday from the main militant group in Nigeria’s restive south that it had launched two more attacks on oil pipelines in the region. There was no immediate confirmation. On Friday, oil prices rose to touch $117 for the first time after an attack on a Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta. Shell confirmed a pipeline leak that it said appeared to have been caused by explosives. It said it had isolated the line for repairs and that a small quantity of production had been shut. Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country’s normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the U.S. Comments over the weekend by an OPEC official that the group was not likely to increase production also supported prices Monday. Abdalla Salem el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply - something he doubted. “Oil prices, there is a common understanding that has nothing to do with supply and demand,” Mr. el-Badri said on the sidelines of an energy conference in Rome. Also over the weekend, Iran’s hard-line President Mahmoud Ahmadinejad was quoted Saturday as saying crude oil prices at $115 a barrel are too low, and that oil must “discover its real value.” The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday. In other Nymex trading, heating oil futures fell 0.182 cents to $3.2741 a gallon while gasoline futures fell .0254 cents to $2.9639 a gallon. Natural gas futures fell a penny to $10.577 per 1,000 cubic feet.

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