NEW YORK - Oil futures rose back above $131 yesterday, leading investors to set aside, at least for a day, concerns that falling U.S. gas consumption would depress demand for oil.
At the pump, the average price of regular-grade gasoline nationwide was unchanged for the third straight day at $3.94 a gallon.
Gasoline prices rose in the Philadelphia area. The average for regular in the city and the four suburban counties in Pennsylvania was up a penny yesterday from Tuesday at $3.98 a gallon, AAA Mid-Atlantic said. The average for the three suburban counties in South Jersey was $3.83, up 2 cents from Tuesday.
AAA said 129 gasoline stations in the five Pennsylvania counties and one in South Jersey were charging $4 or more per gallon yesterday. That compared with just five stations in the whole region on May 19.
Gasoline prices are likely to keep rising as long as crude prices do not collapse, analysts said. And that means prices will soon breach the psychologically important $4-a-gallon level nationally.
"I can't see anything to stop it from going there," said Chip Hodge, energy portfolio manager at John Hancock Financial Securities Inc., of Boston.
Light, sweet crude for July delivery rose $2.18 yesterday to settle at $131.03 a barrel on the New York Mercantile Exchange, after spending the morning swinging between gains and losses.
Crude prices received a boost from word that Nigerian rebel group The Movement for the Emancipation of the Niger Delta threatened attacks on oil facilities beginning today to mark the first anniversary of President Umaru Yar'Adua's inauguration.
A weekend attack by the group on an oil facility cut about 130,000 barrels of the nation's oil production, said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn., in a research note. News of disruptions in Nigeria, a major U.S. supplier, has helped push oil prices higher over the past year.
Oil investors also received mixed signals from the dollar, which rose against the euro, but fell against the Japanese yen and British pound. When the dollar drops, investors tend to buy commodities such as oil as an inflation hedge. A stronger dollar makes oil more expensive to investors dealing in other currencies.