Gas prices hit new high; crude edges up some

NEW YORK - Gas and diesel pump prices jumped to another record yesterday, piling on the costs for motorists as well as consumers reliant on trucks, trains and ships that deliver goods.

Retail gasoline rose 0.8 cents to a national average of $3.365 a gallon, according to AAA and the Oil Price Information Service.

The increase marks the latest in a series of retail gasoline records in recent weeks, and leaves drivers paying 56 cents more a gallon now than they did a year ago. And there may be more increases to come.

"We do think prices, particularly for self-serve regular, are going to continue to go up," AAA fuel price analyst Geoff Sundstrom said.

Oil prices also edged higher in a late-day push, but remained more than $2 below an all-time high set earlier in the week. Light, sweet crude for May delivery rose 3 cents to settle at $110.14 on the New York Mercantile Exchange.

Analysts expect gasoline prices will continue to set records as the summer driving season approaches and refineries complete their conversion to more expensive summer-grade fuel. It is unclear how high prices will go, however, because some drivers could cut back.

Retail diesel prices rose 2.1 cents to $4.066, topping the previous high set a day earlier. The spike is significant because it affects the cost of a wide range of goods - meaning that even those who don't drive will feel the pinch.

"It's obviously a very distressing situation for the commercial transportation sector," Sundstrom said.

An unexpected decline in U.S. crude and gasoline inventories drove oil prices to a trading record of $112.21 a barrel on Wednesday amid concerns about inadequate supplies. Prices fell Thursday.

Crude prices were under pressure for most of yesterday after the International Energy Agency lowered its global oil demand forecast for the year by 310,000 barrels a day to a level of 87.2 million barrels a day, citing lower economic output expectations in the United States and elsewhere.

The U.S. dollar strengthened against the euro and the pound, which also helped keep crude prices from overheating further.

Crude oil's recent run has been largely attributed to the steadily depreciating U.S. currency. A weakening dollar attracts investors to commodities as a hedge against inflation, but when the dollar rises, the effect tends to reverse as oil also becomes more expensive to investors overseas.