Gas prices climb; crude falls

NEW YORK - Gasoline prices in the Philadelphia area and nationally shot up yet again yesterday, but some analysts said the sharp increases of recent days could soon moderate.

Crude oil prices, meanwhile, fell more than $2 a barrel as the dollar gained strength against the euro.

At the pump, the average national price of a gallon of regular gas jumped 2.3 cents overnight to $3.556 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Prices have risen nearly 14 cents in one week.

In the five-county Philadelphia area in Pennsylvania, they rose 3 cents to an average of $3.53 a gallon yesterday, according to AAA Mid-Atlantic. That was up 20 cents from a week ago.

In the three South Jersey counties in the Philadelphia suburbs, the average yesterday was $3.37, up 2 cents from Wednesday and 22 cents from a week ago.

Across the country, gas prices have advanced sharply in recent days, partly because refiners have been switching over from selling winter-grade gasoline to the more expensive but less polluting form of the fuel the government requires them to sell in the summer. That process, which made winter-grade fuel more scarce, is nearly complete now, suggesting that price increases could slow.

Retail gas prices have also been following oil futures' record rally, although pump prices have not risen as steeply as oil futures.

Crude prices have jumped about 80 percent in one year, while retail gas prices are up only 24 percent in that time.

But yesterday, light, sweet crude for June delivery fell $2.24 to settle at $116.06 a barrel on the New York Mercantile Exchange. Analysts said the dollar's rise against the euro gave investors a chance to lock in profits from oil's recent record run.

Investors see commodities such as oil as a less effective hedge against inflation when the dollar strengthens.

In trading yesterday in New York, it took $1.5686 to buy one euro, down from $1.5896 Wednesday. It was the second consecutive day of gains for the dollar, distancing the U.S. currency from its record low of $1.6018, reached Tuesday.

Analysts believe the dollar is gaining ground on speculation the Federal Reserve is growing concerned about inflation, and may not cut interest rates as much as once thought. Higher interest rates tend to stabilize or strengthen the dollar.

Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said the resolution of a one-day strike by oil workers in Nigeria, a major U.S. supplier, also pushed oil prices lower.