Gasoline tops $3 a gallon

Gargi Chakrabarty, Rocky Mountain News

Friday, May 4, 2007

It didn't take long for pump prices in Colorado to break through the $3-a-gallon mark.

The average statewide price for a gallon of regular unleaded gas on Thursday hit $3.009, according to AAA Colorado, a few cents below last year's record level of $3.076 on Aug. 11.

Last year, it was the threat of hurricanes that drove the price of crude oil.

This time around, the culprit is a severe gasoline supply crunch brought on by refinery outages.

"Gas prices in Colorado have risen for the 13th consecutive week," said AAA Colorado spokesman Eric Escudero.

Spot outages at some metro Denver and Colorado Springs gas stations began more than a month ago after Valero's McKee refinery in Texas was shut following a Feb. 16 fire. That refinery, which supplies Colorado via a pipeline, is back online but operating at only partial capacity.

Since then more refineries have reported problems. And the supply situation in Colorado has worsened.

On Thursday, Colorado ranked the 15th most expensive state for gas, up from last week's 20th.

-----The national average retail price of a gallon of gasoline rose 1.4 cents, to $2.991, on Thursday, according to AAA.

Analysts think the market for gasoline is likely to remain tight and that prices will therefore stay high. Many analysts are concerned gasoline supplies won't be adequate to meet peak demand during the summer driving season, which begins Memorial Day weekend.

That means prices will likely continue rising until gasoline inventories increase.

"The market is fundamentally bullish," said Jack Hunter, an energy trader at FC Stone Group, in Kansas City, Mo. "I definitely think this market is still spooked by gasoline supplies."

chakrabartyg@RockyMountainNews.com or 303-954-2976. Rocky wire services contributed to this report.