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Gas prices rise 14 cents in 14 days

Motorists in Boston, Massachusetts, pump gas Friday.
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(CNN) -- Gas prices in the United States continued to climb sharply over the past two weeks, rising more than 14 cents to an average of $2.07 per gallon, according to a nationwide survey released Sunday.

Drivers in San Diego, California, paid the most, at $2.36 per gallon of self-serve regular. Those in Charleston, South Carolina, paid the least, at $1.87 per gallon, said Trilby Lundberg, whose Lundberg Survey tallied prices between May 7 and May 21.

The price of crude oil "is still a driver of the high prices," she said.

Crude oil prices exceeded $41 on some days during the survey, although they closed below $40 on Friday.

Lundberg said three other factors added to the cost:

  • Seasonal demand is rising as Americans begin to drive more during the warmer months.
  • The improvement in the nation's economic health has increased demand for oil.
  • Refiners are gearing up to meet a June 1 deadline to reformulate gasoline to reduce smog in the summer, a process that has forced some refineries off-line.
  • Lundberg predicted that those members of the Organization of Petroleum Exporting Countries that can pump more will begin doing so soon, even if they do not announce an agreement to do so publicly in their planned June 3 meeting in Beirut, Lebanon.

    Saudi Arabia announced Sunday at an unofficial OPEC meeting in Amsterdam, Netherlands, that it would boost its production next month by 28 percent.

    Energy Secretary Spencer Abraham said after meeting with Saudi oil minister Ali al-Naimi that the Saudis will boost their production from nearly 7.1 million barrels per day to 9.1 million.

    Iranian oil minister Bijan Namdar Zangeneh said the pressure to boost production was related to November's upcoming presidential election in the United States.

    "We had the situation like it four years ago where we were very close to another presidential election in the United States," he said. "Every day we are going to be closer to this date, we will have some pressure ... to do something and to satisfy their voters."

    In his book "Plan of Attack," journalist Bob Woodward reported the Bush administration had been assured Saudi Arabia would increase production to reduce oil prices to help the U.S. economy in the months before the election.

    Prince Bandar bin Sultan, the Saudi ambassador to the United States, has said there were no secret deals to control oil prices.

    At what point do you think average gas prices will peak?
    Under $2.50
    $2.50 - $3.00
    Over $3.00
    • Seattle, Washington: $2.31
    • Long Island, New York: $2.21
    • Detroit, Michigan: $2.09
    • Washington, D.C.: $2.08
    • Denver, Colorado: $1.98
    • Albuquerque, New Mexico: $1.94
    • Houston, Texas: $1.90

    Lundberg said it is likely many nations will try to increase oil production.

    "Those that can will do so, either officially -- as Saudi Arabia has -- or unofficially, simply because of the temptation of higher prices," she said.

    Still, she predicted, the increased production may not offset the factors that continue to pull up the price of gasoline.

    "I don't think it has peaked and I don't think an increase in oil production immediately can offset the immediate up pressures that exist specific to the U.S. gasoline market," she said.

    One of the biggest factors behind the price surge, analysts said, is limited U.S. refining capacity.

    The United States has had to import large amounts of gasoline -- crude oil refined elsewhere -- thereby increasing the strain on the overall oil market, the analysts said.

    Although the prices now are the highest ever -- the sixth consecutive Lundberg survey to report that -- they are not the highest if the prices are adjusted for inflation.

    That happened during the oil crises of the late 1970s and early 1980s -- when crude rocketed to more than $70 a barrel as calculated in today's dollars.

    OPEC oil ministers have not been worried that the increased prices will shrink demand, Lundberg said.

    "World demand has been growing, despite the prices, mostly due to the United States' and China's oil demand leading the demand increase," she said.

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