U.S. Gasoline Price at Record $3.20

The average price of regular gasoline at the pump in the U.S. rose 9 cents in the past two weeks to a record $3.20 a gallon, according to oil industry analyst Trilby Lundberg's survey of 7,000 filling stations nationwide.

Gasoline futures rose to $2.6943 a gallon on the New York Mercantile Exchange on March 7, the highest closing price for a contract closest to delivery since the reformulated fuel began trading in 2005. Crude-oil futures climbed to a record $106.54 a barrel the same day.

We will probably see 20 or 30 cents more at the pump very soon, possibly within a month, Lundberg said in an interview today. This is all if crude oil prices don't slide substantially, and it doesn't seem likely that they will.

The previous record of $3.18 a gallon, set in May, remains the highest on an inflation-adjusted basis, she said.

Rising prices have caused demand for gasoline to fall 1.3 percent from a year ago to 9.07 million barrels a day, a U.S. Energy Department report on March 5 showed.

Oil prices increased as the dollar weakened to a record low against the euro. Investors use physical commodities, including oil and gasoline, to hedge against a weakening dollar. As the dollar declines, dollar-denominated commodities become cheaper.

The euro climbed to $1.5459 on March 7, the highest since the currency's debut in 1999.

Last week, the Organization of Petroleum Exporting Countries refused to raise production after President George W. Bush said it would be a mistake to let high energy prices slow the economy.

Oil also rose after Venezuelan President Hugo Chavez sent 10 tank battalions to the border with Colombia in response to a Colombian air raid against a guerrilla camp in Ecuador. Venezuela and Ecuador are the only OPEC members in the Western Hemisphere.

The highest average price for self-serve regular gasoline was $3.58 a gallon in San Francisco, Lundberg said. The lowest was in Cheyenne, Wyoming, at $2.95 a gallon. On New York's Long Island, the price was $3.30 a gallon.