Price of gasoline rises with stock market

Good economic news is bad gas-price news for motorists. Even though demand for gasoline is poor, prices have been rising in lockstep with the optimistic stock market.

"When we get positive economic news, we're seeing oil prices go up," said Windy VanCuren with the AAA Mid-Atlantic travel group. "And gas prices mimic oil prices, so they're going to go up."

The Dow Jones industrial average is up better than 1,100 points -- more than 15 percent -- over the past month.

Meanwhile, the average price in the Richmond area for self-service regular gasoline went from $2.39 a gallon a week ago to $2.51 yesterday -- with a jump of 3 cents a gallon over the weekend, AAA reported.

Nationally, the average price of self-service regular was $2.65 yesterday, up 2 cents from Friday and 10 cents from a month ago, the organization said.

"It doesn't make sense," said Michael J. O'Connor, president and CEO of the Virginia Petroleum, Convenience and Grocery Association, which represents about 4,000 retail gas outlets in the state. "The economy is still down, diesel consumption is down . . . gasoline consumption is down . . . and usually when demand is down, price is reduced."

Responding to the recent climb in crude oil prices, gas prices should edge slightly higher even as the summer driving season comes to an end, said AAA's Martha M. Meade. "Oil supplies are plentiful, and demand remains weak," she said, so "any negative news is likely to send prices down again."

Wholesale fuel dealer John C. Zehler Jr. agreed with that assessment. "I'm still optimistic that we're going to come off these prices . . . by the end of the summer," said Zehler, with Virginia Fuels Inc. in Mechanicsville.

Since Memorial Day weekend, gas prices have climbed 22 cents, AAA said.

Crude oil broke through the $70-a-barrel mark last week after shooting up from below $62 a barrel the week before, marking the fourth straight week of increases.

Current oil prices are more than double what they were in December when they dropped below $33 a barrel, yet still less than half last July's record of above $147 a barrel, AAA said.

Gas prices will likely remain up as long as the equity market stays strong, Zehler said, though given a rapid market correction or profit-taking, prices could drop back around $2 a gallon in a few days.

On the other hand, he said, "I've been saying this all summer."

Contact Peter Bacqué at (804) 649-6813 or .