Local News

Gas Prices Hit All-Time High in Triangle

Posted March 1, 2008 3:02 p.m. EST
Updated October 12, 2011 9:49 a.m. EDT

— Gas prices in the Triangle hit an all-time high Saturday, a day after crude oil prices pushed past $103 per barrel for the first time.

The average cost of a gallon of regular unleaded gasoline rose to $3.184 in Raleigh, Durham and Chapel Hill, according to AAA and the Oil Price Information Service. Diesel fuel also set a new record of $3.612 per gallon.

A month ago, the average price of regular gas stood at $2.961. A year ago, it was at $2.366.

Light, sweet crude oil spiked to $103.05 per barrel early Friday before falling 75 cents to settle at $101.84 on the New York Mercantile Exchange.

Adjusted for inflation, those prices are just below crude oil's all-time high of $103.76 set in early 1980 during the Iranian hostage crisis.

Energy analysts blamed the slumping dollar, tensions in the Middle East and profit-taking by investors who bought into oil's recent run-up and sold on Friday.

A price bubble was emerging in the crude futures market as investors ignored market fundamentals that have shown continuous increases in U.S. crude supply, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. Meanwhile, several recent forecasters have lowered oil demand growth predictions for this year due to the slowing economy.

"We've seen seven straight weeks of builds in crude oil inventories. The oil market fundamentals are softening, and yet we see record highs being set, day in and day out," Shum said.

Shum warned of the possibility of a sharp correction at some point, though unlikely in the near term.

"Right now, there's a lot of trading based on emotion," Shum said. "Emotions are high, and that could keep crude oil at elevated levels, but the market faces the risk of a price collapse."