Retail gas prices are spiking to levels last seen in the heat of summer driving season, raising fears that consumers could cut back on holiday spending.
The average price for a gallon of regular gasoline rose for the 13th straight day, adding sixth-tenths of a cent overnight to $2.671, according to auto club AAA, Wright Express and Oil Price Information Service.
That's still below what drivers were paying at this time last year, but the 20-cent, two-week jump could prompt consumers already dealing with a climbing unemployment rate, depreciating home prices and damaged 401k accounts to spend less over the holidays, said Ryan Sweet, a senior economist with Moody's Economy.com.
"If they're spending more money at the pump, they're going to be less willing to go out to the malls to spend frivolously," Sweet said.
Gas prices hit their summer peak of $2.6925 on June 21, but drivers could soon be paying more than that if prices continue inching upward. With fewer motorists on the road after summer's end, drivers typically get a break on prices this time of year.
"Until consumers are confident in their jobs and future income, they're going to be very hesitant in spending," Sweet said. "And higher gas prices are just another excuse to keep money in the pocket."
Crude prices, which rose to $82 last week, fluctuated Monday as the dollar hit a fresh 14-month low against the euro before strengthening. Because commodities are priced in dollars, a drop in the U.S. currency makes them cheaper to international investors.
Benchmark crude for December delivery fell $1.19 to $79.31 a barrel on the New York Mercantile Exchange. The contract dropped 69 cents a barrel to settle at $80.50 on Friday.
PFGBest analyst Phil Flynn said weakness in the U.S. dollar has driven the price of oil far beyond the realities of what normal supply and demand fundamentals typically bear.
"The increase was driven not so much by demand but by declining gas production and a weakening dollar," Flynn said in his morning report. "Things are out of whack as refiners have scaled back production to historic lows as their margins get squeezed."
Traders will be looking to a slew of corporate results and economic indicators for guidance this week. The Commerce Department is scheduled to announce third-quarter gross domestic product, with reports on housing prices, new home sales, consumer confidence and durable goods orders also due during the week.
In other Nymex trading, heating oil lost 2.94 cents at $2.0462 a gallon. Gasoline for November delivery gained 0.23 cent at $2.0461 a gallon. Natural gas for November delivery slid 30 cents to $4.487 per 1,000 cubic feet.
In London, Brent crude for December delivery fell 95 cents to $77.97 a barrel on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore and Pablo Gorondi in Budapest, Hungary, contributed to this report.