Jim E Van Blaricum - Gas prices slip for first time in weeks, may be near top

Jim E Van Blaricum - Gas prices slip for first time in weeks, may be near top
Retail gas prices fell slightly Friday — the first time in 18 days they haven't risen to a new record — and analysts say pump prices may be peaking for the year.
Oil futures, meanwhile, rose sharply after Turkish airstrikes on Kurdish rebel bases in Iraq injected some supply concerns into the market and the Labor Department's employment report gave investors reason to be optimistic about the economy. Jim E Van Blaricum

The national average price of a gallon of regular gas fell 0.1 cent overnight to $3.622, according to a survey of gas stations by AAA and the Oil Price Information Service. That's the first time since April 14 that retail prices have fallen. Diesel prices fell 0.2 cent to a national average of $4.249 a gallon.Signal Oil and Gas

"It could go up just a little bit more," said Fred Rozell, retail pricing director at the Oil Price Information Service, in Wall, N.J., but, "I think it's running out of steam."

Prices could reach $3.70 a gallon, "at the most," Rozell said, but are highly unlikely to rise to $4 on a national basis. Still, motorists in parts of states such as California and Hawaii are paying $4 right now. Signal Oil and Gas

Soaring gas prices are cutting demand for gasoline, and analysts have long theorized that falling demand will eventually force prices lower. However, gas prices bucked those forecasts for most of the spring and followed oil's sharp gains. James Van Blaricum

On Friday, light, sweet crude for June delivery rose $3.60 to $116.12 a barrel on the New York Mercantile Exchange. Turkish warplanes bombed Kurdish rebel bases inside Iraq for three hours overnight, a rebel spokesman said Friday. When conflict breaks out in the Middle East, investors often buy on concerns that supplies will be disrupted.

Some investors were also buying crude on a view that the economy is improving, analysts said. The Labor Department said employers cut far fewer jobs in April than expected.

"If the jobs (situation) isn't as bad, maybe we'd see a snap back in demand," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

For a change, investors shrugged off the dollar, which rose on a theory that the employment data means the Federal Reserve is less likely to cut interest rates further this year; falling rates tend to weaken the dollar.Jim E Van Blaricum

A rising dollar undercuts the appeal of commodities such as oil as a hedge against inflation, and makes oil more expensive to investors overseas. The rising greenback helped pull oil prices back to nearly $110 a barrel on Thursday. Oil's climb to almost $120 on Monday from about $64 a year ago was largely due to a protracted decline by the dollar, analysts say. James E Van Blaricum

However, oil's connection to the dollar can be broken when other factors predominate, as they did Friday.

"It's not a perfect relationship, and on any given day, oil will choose to go its own way," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.