A national survey says the average price for regular gasoline rose about 20 cents in the past three weeks. The average price of self-serve regular gasoline reached $4 a gallon, mid-grade was $4.12 and premium was $4.23. That's all according to the Lundberg Survey of 7,000 stations nationwide released. Of the cities surveyed, the cheapest price was in Wichita, Kansas, where a gallon of regular cost $3.65 on average. The highest average was in Stockton, California, at $4.41. Across California, the statewide average for a gallon of regular was $4.38, up 45 cents over the past three weeks. On the east coast, drivers are paying an average of $4 a gallon, while in the Midwest a gallon of regular costs $3.92.
Saudi Arabia says it will call for a meeting of oil producing countries and consumers to discuss soaring oil prices and work to prevent the unjustified rise in prices. Information and Culture Minister Iyad Madani said the kingdom will work with OPEC to "guarantee the availability of oil supplies now and in the future." In a statement following the weekly cabinet meeting, the minister said Saudi Arabia will work to control "unwarranted and unnatural" price hikes. He says the current price of oil is unjustified. Energy experts say most producers have little ability to expand output quickly. One exception is Saudi Arabia. It's producing more than nine million barrels a day and has the ability to increase production by about two million barrels a day, but has not done so.
The surge in oil prices is translating into even higher costs for air travelers as well as drivers. Some of the nation's biggest airlines raised most domestic fares by an additional $20 roundtrip over the weekend, starting with Fort Worth-based American Airlines. That's adding to the strain on consumers now paying an average of more than $4 a gallon for regular gas. The increases follow a dramatic two-day run-up in oil prices late last week that left the cost of crude more than 13 percent higher in just two days. American was quickly matched by some of its closest competitors, including United and Delta. The airfare research site Farecompare.com says the increase marks the struggling airline industry's 17th attempt to raise fares or fuel surcharges this year. At least a dozen of those increases remain in place across much of the carriers' route networks. Continental Airlines was among the carriers that matched the increase over the weekend, but it rolled the higher prices back on Monday, raising the possibility that other airlines might undo their hikes as well.
There's a bit of better news about the housing market. The National Association of Realtors says pending home sales rose in April to the highest level since October. The group's index rose more than five points to 88 from the previous month. Even so, the measure remains more than 13 percent below year-earlier levels. The index stood at 101.5 in April 2007. Wall Street economists polled by Thomson/IFR had predicted the index would remain steady at 83. A reading of 100 is equal to the average level of sales activity in 2001, when the index started. The trade group's economist says pending sales contracts were higher in some of the areas with the largest price declines, such as Detroit and Las Vegas. He predicts that home prices will drop in the first half of this year before stabilizing. The group also looks for sales of previously-owned homes to rise next year.
The world's top industrialized nations and leading oil consumers say they'll fight skyrocketing energy prices with efficiency and technology. The pledge by energy ministers from the group of eight countries, joined by China, India and South Korea, also urged producers to expand production. The ministers, meeting in Japan, also said both producers and consumers would benefit from greater market stability. Their talks focused on how they could diversify their energy sources. That's seen as helping control rising demand for oil and rein in emissions of greenhouse gases blamed for global warming. There were clear rifts, however, on nuclear energy. The carefully worded joint statement called for assurances on safety and security, but several nations said they were enthusiastic about building new reactors.
A Texas judge has approved a plan by the founders of Gap to take over bankrupt Pacific Lumber, which owns more than 200,000 acres of forests on California's north coast. Environmental groups say Judge Richard Schmidt indicated Friday that he would approve a reorganization plan by Mendocino Redwood, which is owned by Gap founders Don and Doris Fisher. Mendocino Redwood was one of several groups that had submitted plans to take over Pacific Lumber after the timber firm filed for Chapter 11 bankruptcy protection in Texas in January 2007. Humboldt County-based Pacific Lumber is currently owned by Houston financier Charles Hurwitz and his Maxxam Corporation.
The focus will be on inflation and retail sales data this week, as investors dig through fresh economic reports. On Thursday, the Commerce Department reports on May retail sales, with analysts looking for a rebound after April's decline. Friday, the Labor Department releases the Consumer Price Index for May. Reports are also due this week on the U.S. trade balance, the federal budget and consumer sentiment.