NEW YORK More gas and oil records fell Monday as retail fuel prices struck new highs and crude settled above $127 for the first time, tightening the squeeze on drivers planning holiday road trips this weekend.
Light, sweet crude for June delivery jumped 76 cents to settle at a record $127.05 a barrel on the New York Mercantile Exchange. Prices rallied at one point to within a nickel of Friday's record trading high near $128 a barrel.
Meanwhile, Americans are now paying an average of $3.79 for a gallon of regular gas, according to a survey by AAA and the Oil Price Information Service. Diesel, used to transport a wide range of goods, now costs $4.52 a gallon. Those prices, both records, are likely to keep rising, following crude's upward track. In Utah, unleaded regular gas was selling for an average price of $3.69 per gallon Monday.
"We're looking at $4 a gallon (for regular nationwide) once we get past Memorial Day and into June, given the oil prices we're seeing today," said Geoff Sundstrom, fuel-price analyst at AAA.
In Pittsburgh, some drivers said they had been forced to adjust their spending habits because of higher prices at the pump, which are up about 17 percent from a peak at this time last year.
Rose Bonesso, a nonprofit worker, said the rising cost of gas has "hugely" affected her spending, and that she was trying to make fewer car trips from her suburban home.
Drivers in some parts of the country are already paying considerably more than the average. Prices in parts of California have been stuck above $4 a gallon for weeks now, although the statewide average is down to $3.96. Prices in Alaska and Connecticut are averaging just above $4 a gallon.
A report released Sunday showed retail prices topped an average $4 a gallon for the first time in two metropolitan areas: Chicago and New York's Long Island. The Lundberg Survey of 7,000 stations nationwide found the cheapest city to be Tucson, Ariz., where a gallon of regular sold for $3.48 on average.
Oil prices shot higher Monday on a report that the Organization of Petroleum Exporting Countries would not increase production before its next meeting Sept. 9. Algerian Energy Minister Chakib Khelil, the current OPEC president, was quoted in government newspaper El Moudjahid as saying that "current prices aren't linked to the law of supply and demand."
The announcement came days after Saudi Arabia's oil minister said the world's largest oil producer had raised production by 300,000 barrels a day earlier this month.
That increase, while largely ignored by the market, should help grease a tight global market, said John Felmy, chief economist for the American Petroleum Institute, the industry's leading U.S. trade group.
Meanwhile, Holly Corp. said a key unit at its New Mexico refinery was shut down for repairs, cutting estimated May gasoline production by as much as 756,000 gallons per day. The outage is unlikely to significantly affect fuel prices, said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates.