Oil prices have reached a new high for the year, and pump prices could soon follow as Americans map out their plans for Thanksgiving.
Demand isn't driving the increase, as it did in the spring, when gasoline rose to $2.92 per gallon just ahead of the peak driving season. Instead, investors are betting that the Federal Reserve's attempt to stimulate the U.S. economy by purchasing $600 billion in bonds will further weaken the dollar in the near term. In recent weeks, a drop in the value of the dollar has led to the buying of commodities such as gold and oil.
Benchmark oil for December delivery settled up 21 cents to $87.06 a barrel Monday on the New York Mercantile Exchange, the high for the year. The price of oil has risen more than 16 percent since Labor Day.
The national average for a gallon of unleaded regular gasoline was $2.854 Monday, according to AAA, Wright Express and Oil Price Information Service. That's up about a nickel from a week ago and closing in on the high of $2.92 that hit in early May. Gas was selling for about $2.68 on Labor Day.
"For now, it's all about crude, and it's all about the perception that crude is one of the greatest (investment) places to park your money," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Motorists in California, Washington, Oregon, New York and Illinois are among drivers paying the highest prices, in a range of $2.954 a gallon to $3.516 a gallon. The lowest prices range from $2.654 a gallon to $2.705 a gallon and are found mostly in the Midwest, Texas and the South.