Gas prices climb to record $4.10

NEW YORK Sun Jun 22, 2008 6:06pm EDT

A gas station in Los Angeles displays a sign asking for business from its customers in Los Angeles, June 19, 2008. REUTERS/Lucy Nicholson

A gas station in Los Angeles displays a sign asking for business from its customers in Los Angeles, June 19, 2008.

Credit: Reuters/Lucy Nicholson

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NEW YORK (Reuters) - Gasoline is costing U.S. drivers a record $4.10 per gallon on average, but pump prices may be at a peak and could start to come down, an industry analyst said on Sunday.

That optimism is linked to a pledge by Saudi Arabia to pump more oil in response to consumer countries' requests, according to Trilby Lundberg, editor of the nationwide Lundberg survey of about 7,000 gas stations.

"I suspect that oil prices have peaked and will flip further because of this news and the physical addition of more oil on the market in July," Lundberg said. "This gives a strong chance that pump prices are peaking now, or may already have done so."

A barrel of oil has doubled in price over the past year, stoking inflation, triggering protests from Asia to Europe, and compounding the financial pain of U.S. consumers already grappling with a sagging housing market, job uncertainty and soaring food costs.

Top officials, policy makers and oil company executives met on Sunday in Jeddah, Saudi Arabia, for emergency talks on how to bring prices down.

"Crude oil prices may spike at any moment from existing trouble in areas including Nigeria, or from some unforeseen hit to global supply," Lundberg said. "This may sound optimistic, (but) it seems likely at this moment as the meeting in Jeddah, Saudi Arabia is being concluded, that oil prices may have peaked and may drift down."

One common reason cited for the rise of oil prices is soaring demand from developing economies such as India and China, whose emerging middle classes are gobbling up more oil.

Lundberg said it was unclear whether other countries with fuel subsidies would follow China's lead and cut them in efforts to cap demand.

Demand in the United States has fallen about 1 percent year-to-date, though it is closer to 2 percent lower in recent weeks, Lundberg said.

Prices at the pump vary across the country. The luckiest drivers live in Tulsa, Oklahoma, where the city average was $3.76 per gallon, the nation's lowest. At the other end, Los Angeles and Fresno, California, were tied for the nation's most expensive gasoline, with the city averages reaching $4.59 per gallon of regular grade gasoline.

On June 20, U.S. crude closed at $134.71 per barrel, up from $68.19 a year ago.

(Editing by Phil Berlowitz)

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