Costly oil pushes gasoline to 14-month high

By Tom Doggett

WASHINGTON (Reuters) - The effect of high crude oil prices continued to pinch consumers at the pump, with the average cost for gasoline rising 4.9 cents to the highest level in 14 months and diesel fuel soaring 6.3 cents to match the record set two years ago, the government said on Monday.

The national price for regular gasoline averaged $2.87 a gallon, up 65 cents from this time last year and the highest since August 2006, the federal Energy Information Administration said in its survey of service stations.

Pump prices are expected to climb even higher as more of this month's spike in crude oil costs is passed on to drivers.

The price of U.S. oil has jumped about $14 a barrel in October and hit a new record high of $93.80 on Monday at the New York Mercantile Exchange.

Crude oil accounts for more than half the cost of making gasoline.

U.S. crude prices are up because of worries about tight petroleum supplies and the weaker U.S. dollar, which makes oil less expensive for market buyers who use other currencies.

"With prices over $90 a barrel and strong anticipation of $100, the oil market is showing signs of high fever, stoked by fears of clashes in the Middle East and resulting disruptions in supply," Daniel Yergin, chairman of the Cambridge Energy Research Associates, said at an energy conference at Georgetown University in Washington, D.C.

In the EIA's latest weekly price survey, gasoline was the most expensive on the West Coast, up 2.6 cents to $3.09 a gallon. Among major cities, San Francisco had the highest gasoline costs at $3.24, up 4.9 cents.

The Gulf Coast states had the lowest price by region at $2.74 a gallon, up 3.2 cents. Houston had the cheapest pump price at $2.62 a gallon, up 3.2 cents.

The EIA also reported gasoline prices were up 6.7 cents to $3.09 in Seattle, up 3.7 to at $2.93 in Miami, up 5.3 cents to $2.91 in Chicago, up 10.2 cents to $2.91 in Cleveland, up 5.6 cents to $2.80 in New York City, down 0.7 cent to $2.78 in Denver and up 6.7 cents to $2.75 in Boston.

Separately, the average price truckers paid for diesel fuel soared 6.3 cents to $3.16 a gallon, up 64 cents from a year ago and matching the record high set on October 24, 2005, following the supply disruptions caused by hurricanes Katrina and Rita.

The West Coast had the most expensive diesel at $3.39, up 7.1 cents. The Gulf Coast states had the most affordable diesel at $3.06, up 6.8 cents.