Gas pushes above $4, oil falls

NEW YORK — Retail gas prices rose further above a national average of $4 Monday, and are likely to keep rising as distributors and retailers hike prices in response to last week's unprecedented oil price rally.

Oil futures, meanwhile, retreated after Treasury Secretary Henry Paulson said he wouldn't rule out intervention to stabilize the dollar — boosting the greenback against the euro — and after Saudi Arabia said it would call for a meeting to discuss crude prices that it called unjustifiably high.

At the pump, the national average price of a gallon of regular gas rose 1.8 cents overnight to a record $4.023, according to AAA and the Oil Price Information Service. Prices first moved above $4 nationally on Sunday, though they've been higher than that in many parts of the country for weeks.

If oil prices remain near $139 a barrel, last week's record high, gas prices will likely rise another dime in coming days, said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

"The numbers do have some catching up to do," Kloza said. "There's a bit of a tape delay that happens with gasoline."

AAA spokesman Geoff Sundstrom thinks prices could rise another 2 to 3 cents.

Consumers are cutting back on their consumption of gas in response to the high prices, but gasoline producers have little choice but to keep raising prices when the cost of their chief raw material — crude oil — rises. Friday's jump of nearly $11 in oil prices put new life into gas prices, which had appeared to be topping out.

High fuel prices are also causing a shift in consumers' car-buying habits; General Motors Corp. announced plans last week to close four pickup truck and SUV plants, saying high fuel prices have cut sales. At today's prices, it costs nearly $91 to fill a Ford Explorer, up from $70 a year ago. At 14 miles per gallon in city driving conditions, and 20 mpg on the highway, a person who drives that Explorer 25 to 40 miles to and from work — not to mention chauffeuring kids around — has to gas up a couple of times a week, at least.

At $150 a barrel — the Morgan Stanley price prediction that helped ignite Friday's oil rally — gas would cost about $4.40 a gallon, Kloza said.