Drivers heading out for the July 4 weekend will find that filling up the family car is getting more costly.
Retail prices for gasoline have climbed over the past week and are headed back toward a national average of $2.80 to $2.90 per gallon in the United States with higher prices on the West Coast, said Tom Kloza of the Oil Price Information Service.
In Canada, the price at the pump averaged $1.002 per litre, up from 99.7 cents per litre a week ago, according to price-watching website GasBuddy.com.
Prices dropped for about six weeks as oil prices fell over worries that the European debt crisis could spread and crush the global economic recovery and demand for crude.
Those worries have since ebbed, oil is rising again and the stock market has started to recover.
Kloza said he expects the price increases to be modest.
“Much higher prices would roil the economic picture, and the oil price rally has been largely on the coattails of the stock market recovery,” he said.
Prices in the U.S. rose 0.3 cent to a national average of $2.737 per gallon on Monday, according to AAA, Wright Express and Oil Price Information Service. Prices have risen 3.9 cents in the past week and are 7.5 cents below levels of a month ago. Pump prices are 4.4 cents higher than a year ago.
The U.S. government’s Energy Information Administration said the national average price for a gallon of unleaded regular rose 4.2 cents last week, to $2.74 a gallon. California drivers paid the most, with pump prices averaging $3.10 a gallon. Prices were lowest in Virginia, the Carolinas, Georgia and Florida, where the average was $2.63 a gallon.
Oil prices gave up earlier gains on Monday afternoon. China’s move to end its currency’s peg to the U.S. dollar initially fanned enthusiasm for crude, since a stronger yuan will make dollar-based commodities like oil cheaper in China and bolster demand. But uncertainty about how quickly China may implement currency changes trimmed oil prices. Crude gained 64 cents to settle at $77.82 a barrel on the New York Mercantile Exchange after rising as high as $78.92.
The stock market also pulled back after jumping more than 100 points Monday morning on the China news. In recent weeks oil prices have followed signals from stocks about the direction of the economy.
“I think what happened is the market was looking really strong early on,” said Rich Ilczyszyn, senior market strategist for the Lind-Waldock brokerage. “It didn’t have enough power to continue that rally. The longer we sit up there, the more attractive it looks to sell.”
In other Nymex trading, heating oil rose 1.70 cents to settle at $2.1459 a gallon, gasoline dropped 0.48 cent to settle at $2.1428 a gallon and natural gas fell 12.4 cents to settle at $4.873 per 1,000 cubic feet.
Brent crude rose 60 cents to settle at $78.82 on the ICE futures exchange.