Prices at the pump taking a breather, oil hovering

Benchmark crude for December delivery added $1.28 to $77.28 a barrel on the New York Mercantile Exchange on encouraging U.S. economic numbers on manufacturing, construction and home sales.

By DIRK LAMMERS
The Trucker Staff

11/2/2009

Gasoline's post-summer ascent took a breather below $2.70 a gallon Monday, as consumers begin to decide whether the money they pour into their tanks will force them to cut back on holiday spending.

Retail gas prices have jumped about 23 cents since the beginning of October. The average price for a gallon of regular unleaded fell two-tenths of a cent overnight to $2.691, according to auto club AAA, Wright Express and Oil Price Information Service.

That's a big change from the fall of 2008, when plummeting prices offered one of the few breaks for consumers as thousands lost jobs and businesses shut down. Gas in 2008 dropped from around $3.62 a gallon in the beginning of October to $2.44 at this time last year.

Meanwhile, benchmark crude for December delivery added $1.28 to $77.28 a barrel on the New York Mercantile Exchange on encouraging U.S. economic numbers on manufacturing, construction and home sales.

The Institute for Supply Management, a trade group of purchasing executives, said Monday that U.S. manufacturing activity grew in October at the fastest pace in more than three years, helped by government spending and higher demand from overseas.

The strong report raised hopes that energy demand, which has been hampered by the recession, may be rebounding. Yet the dollar keeps falling, which has helped push oil prices higher as well.

Dollar-based oil can look like a bargain for investors holding stronger currencies.

Also Monday, the Commerce Department reported Monday that September construction spending posted a better-than-expected performance, powered by the largest jump in housing construction in more than six years.

And the National Association of Realtors said that the volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.

Oil also received a boost from a weakened dollar and strong economic data out of China.

In other Nymex trading, heating oil gained 3.8 cents to $2.0429 a gallon. Gasoline for December delivery gained 3.4 cents to $1.994 a gallon. Natural gas for December delivery fell 15.5 cents to $4.89 per 1,000 cubic feet.

In London, Brent crude for December delivery gained $1.50 to $76.70 on the ICE Futures exchange.

Associated Press Writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.

The Trucker staff can be reached for comment at editor@thetrucker.com.

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