LOS ANGELES (CBS/AP) — The average price for a gallon of self-serve regular gasoline in Los Angeles County has risen to the highest amount since August 24, 2008, increasing 1.1 cent Wednesday to $3.929.
The 35th increase in 36 days pushed the average price 14.4 cents higher than a week ago, 52.5 cents above what it was one month ago and 86 cents greater than it was one year ago, according to figures from the AAA and Oil Price Information Service.
Meanwhile, oil prices remained near $105 a barrel Wednesday amid mixed signs about U.S. demand and as fighting continued in Libya between rebels and forces loyal to Moammar Gadhafi.
By early afternoon in Europe, benchmark crude for April delivery was down 3 cents at $104.99 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 42 cents to settle at $105.02 on Tuesday.
In London, Brent crude was up 91 cents at $113.97 a barrel on the ICE futures exchange. The spread between the two key oil futures stems in part from Brent’s higher sensitivity to events in Libya, reflecting Europe’s greater dependence on its crude and natural gas exports.
So far, most of Libya’s 1.6 million barrels per day of crude production has shut down, the biggest disruption to oil exports since a wave of political upheaval this year toppled governments in Tunisia and Egypt and sparked violent protests in Algeria, Morocco, Yemen, Oman, Bahrain and Iran.
Traders are especially concerned unrest could spread to Saudi Arabia, the world’s largest crude exporter.
“Despite the continued fighting in Libya, making a normalization of Libya’s oil production soon an unlikely prospect, concerns about supply tightening have eased a little,” said analysts at Commerzbank in Frankfurt. “The rally of crude oil prices is not being driven by an actual tightening of supply, but rather the fear that the unrest will spread to other oil producing countries.”
Saudi Arabia has raised output to make up for a drop in Libyan exports, cutting into its surplus supply.
“Should another country on the scale of Libya also exit the market, Saudi Arabia’s spare capacities would be likely to fall to a critical level of less than two million barrels a day,” Commerzbank said.
Bank of America Merrill Lynch raised its 2011 oil price forecast to $101 from $87 and expects Brent crude to average $122 in the second quarter.
“With so many open fronts, additional oil disruptions cannot be ruled out due to contagion risk,” Bank of America Merrill Lynch said in a report. “For example, unrest in Bahrain is likely to increase the risk of social unrest spreading into Saudi Arabia or Iran.”
“Our base case assumes Libya will stay mostly offline for 6 months, limited oil infrastructure damage, no further oil supply disruptions in the region and modest global demand destruction.”
Helping to cool crude prices in the United States was data showing a larger than expected rise in U.S. stockpiles.
The American Petroleum Institute said late Tuesday that crude inventories rose 3.8 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast an increase of 2.3 million barrels. However, inventories of gasoline fell 3.7 million barrels and distillates fell 1.5 million barrels, the API said.
(TM and © Copyright 2011 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)