Gas costs record $3.34; oil tops $112

NEW YORK - Gasoline prices set another record yesterday, and crude oil topped $112 a barrel for the first time in the futures market.

The national average price of a gallon of regular unleaded gas rose 1.2 cents to a record $3.343 a gallon, according to a survey of gas stations by AAA and the Oil Price Information Service.

In Philadelphia and its four suburban counties in Pennsylvania, the average pump price was up a penny from the day before to $3.26 a gallon, according to AAA Mid-Atlantic. In the three suburban counties in South Jersey, the average yesterday was 2 cents higher than Tuesday at $3.07 a gallon.

A year ago, the average in those five Pennsylvania counties was $2.78, and it was $2.57 in the three South Jersey counties.

Nationally, prices are 55 cents higher than a year ago - a level that is limiting demand for gasoline.

"People are cutting back on gasoline purchases because the economy is squeezing them right now," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago.

At the same time, according to a government report Tuesday, crude-oil supplies fell last week a surprising 3.2 million barrels.

That sent light, sweet crude for May delivery up $2.37 yesterday to settle at a record $110.87 a barrel on the New York Mercantile Exchange. Earlier in yesterday's session, the crude price rose as high as $112.21. That beat a trading record of $111.80 set last month.

Analysts expect demand for gas and oil to fall further as prices rise. Theoretically, that should bring prices down. But so far this year, gas and oil prices have shown little inclination to fall in response to eroding demand. With gasoline supplies shrinking and the summer approaching - when demand, while weaker than last year, will be stronger than it is now - consumers may have to wait until autumn for price relief.

Some analysts cautioned against reading too much into last week's drop in crude supplies.

Flynn said he believed crude imports fell in part because fog last week closed several shipping channels in Texas and Louisiana that serve as vital oil-import conduits.

"That leads me to suspect that there are more ships out there in the Gulf [of Mexico] that didn't get counted," he said.

In other trading yesterday, May natural-gas futures rose 35.9 cents to settle at $10.056 per 1,000 cubic feet.