NEW YORK –Americans getting an early start on the Memorial Day weekend found that gasoline prices again sprinted to a new record high overnight, reaching a national average above $3.83 a gallon. Some analysts predict gas will break past $4 as early as next week.

Oil prices, meanwhile, fell Thursday after setting a new trading record of $135.09 overnight. A stronger dollar gave some investors reason to sell oil futures to lock in profits from crude’s record run. But concerns about falling supplies and rising demand are expected to keep propelling prices higher in the days and weeks to come.

Oil’s surge is contributing directly to the pain consumers feel every time they fill up. At the pump, the average national price of a gallon of regular gas rose 2.4 cents overnight to $3.831, according to a survey of stations by AAA and the Oil Price Information Service. Prices are 61 cents higher than a year ago.

Unlike last year, oil prices are setting new record highs on a daily basis. That’s pushing gas prices higher, and analysts see no reason for gas not to follow.

“We’re going to blast past $4,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

Prices may rise as high as $3.90 on a national basis by this weekend, he said. Prices are already above $4 a gallon at many stations around the country, and are averaging more than $4 in California, New York and Illinois, among other states.

Oil prices rose to $135.09 a barrel in overnight electronic trading on the New York Mercantile Exchange before retreating to settle down $2.36 at $130.81 a barrel by afternoon in New York.
Analysts said oil futures are caught between the supply and demand concerns that boosted crude to its latest record, and a desire by some investors to cash in some profits. The dollar, one of the factors that has fed oil’s rally from about $65 a year ago, strengthened against the euro Thursday. When the greenback gains ground, commodities such as oil lose their value as hedges against inflation. Also, a stronger dollar makes oil more expensive to investors overseas.

At times in a price runup that’s added nearly $9 to a price of crude this week, and almost $16 over the past month, investors will sell to take profits, analysts said. Crude rose $4.19 a barrel on Wednesday alone.

The Paris-based International Energy Agency on Thursday said it is worried about whether there is enough oil to meet global demand, and is working on a review of the world’s 400 largest oil fields that could lead to a major revision in its closely-watched forecasts.

“The market is really structurally tight … oil demand is not growing that fast but supply is constrained,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Some analysts say crude has been boosted in recent days by especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal after last week’s earthquake, Kevin Norrish, an analyst with Barclays Capital PLC, said new data from China shows demand for diesel was already rising quickly before the disaster. Chinese diesel imports rose 9.2 percent in April compared to last year, Norrish wrote.

Still, many analysts argue that oil prices have risen far beyond levels that can be justified by supply and demand. This school of thought believes the dollar’s decline has attracted speculators to oil and other commodities, artificially inflating prices. Some analysts see signs in the prices differences between the current July crude contract and contracts for delivery in future months that could mean oil prices are set to decline in coming months.

In other Nymex trading Thursday, June heating oil futures rose 4.59 cents to settle at a record $3.9543 a gallon after earlier rising to a trading record of $4.0153. Heating oil, which is closely related to diesel, is often traded as a proxy for diesel.

June gasoline futures fell 6.68 cents to settle at $3.3297 a gallon after rising earlier to their own trading record of $3.438. June natural gas futures rose 5.7 cents to settle at $11.697 per 1,000 cubic feet. The Energy Department said natural gas inventories rose last week by 85 billion cubic feet, in line with analyst estimates.

In London, July Brent crude futures fell $2.19 to settle at $130.51 a barrel on the ICE Futures Exchange.

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Associated Press Writer Pablo Gorondi in Budapest and AP Business Writer Thomas Hogue in Bangkok, Thailand, contributed to this report.

Rome—World rice prices that have tripled in Asia over the course of the year may come down but overall food prices will remain high for years to come, leaving millions more hungry, a U.N. food agency warned Thursday.

High oil prices, growing demand, flawed trade policies, panic buying and speculation have sent food prices soaring worldwide, trigging protests from Africa to Asia and raising fears that millions more suffer malnutrition.

On Thursday, tens of thousands of workers in Senegal — from teachers to tax officials, fishery and port workers — stayed home as part of a strike staged by unions to protest the spiraling cost of rice, fuel and other basic goods.

Surging food prices have also sparked riots in Haiti and fed worries about supplies in the Philippines.

The Food and Agriculture Organization said it had some good news: The world prices of most agriculture commodities have started to drop.

The bad news: The prices are unlikely to fall back to pre-2007 levels, the agency said in a report Thursday.

“We are facing the risk that the number of hungry will increase by many more millions of people,” said Hafez Ghanem, assistant director-general of the FAO.

Conditions on the global rice market could ease as new crops are harvested around the world. But price pressures will remain high until at least October or November, when the bulk of this year’s paddy crops reach the market, the report said.

“Stock levels are low and you need several good seasons to replenish them,” Ghanem said. “There will be some improvement, but we don’t expect a major change.”

Internationally, rice prices skyrocketed by about 76 percent from December to April while overall food prices have risen 83 percent in three years, according to the World Bank.

In Asia, rice prices have tripled this year, with the regional benchmark hitting $1,038 a ton Wednesday for Thai 100 percent grade B white rice.

The FAO said the price pressure could ease further if producing countries such as India relax export restrictions on rice.

Recent natural disasters such as the cyclone in Myanmar and the earthquake in China are likely to have a domestic impact, rather than on international markets, FAO experts said.
In Geneva, the U.N. Human Rights Council debated a Cuban resolution expressing “grave concern at the worsening of the world food crisis.”

The resolution, co-signed by most members of the 47-nation council, said nations “have a primary obligation to make their best efforts to meet the vital food needs of their population.”
The international community, meanwhile, must provide poorer nations with food aid and assistance so that farmers can increase food production and improve “food crop rehabilitation,” the draft resolution says.

In Japan, a government official announced Thursday that his nation would release some of its huge stockpile of rice to help ease the crisis, sending some 20,000 tons to five African nations in coming weeks.

That step is part of a $50 million emergency food aid plan to be endorsed by Japan’s Cabinet on Friday, said Shigeru Kondo, a Foreign Ministry aid official.

The total aid package — which includes grains, beans and other foods in addition to rice — will be distributed in 12 countries, including Afghanistan, by international relief agencies such as the World Food Program.

Thailand’s prime minister assured the Philippines during a visit there Thursday that his government was willing to increase Manila’s rice inventories, an official said.

The FAO is forecasting an increase of 3.8 percent in this year’s cereal production compared with last year, assuming favorable weather. Tight wheat supply is likely to improve the most, the agency said. Global milk, sugar and meat production are also expected to grow.

Recently, FAO said rice production is expected to hit a new record of 666 million tons worldwide, a global increase of 2.3 percent.

Production in Asia is forecast to rise to 605 million tons from 600 million tons, with particularly large increases in Bangladesh, China, the Philippines, Thailand and Vietnam, the agency has said.
African production is forecast to grow nearly 4 percent to 23.2 million tons and in Latin America by 7.4 percent to 26 million tons, while production is expected to be down in Australia, the United States and Europe.

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Associated Press writers Bradley S. Klapper in Geneva, Switzerland, and Sadibou Marone in Senegal, Dakar, contributed to this report

IOCC will provide cash support to its ecumenical partners who are on the ground and evaluating the damage throughout the affected areas. IOCC’s cash grant will help provide emergency relief supplies for the survivors.

Contributions to IOCC’s China Emergency Appeal can be made online (www.iocc.org), by calling IOCC’s donation hotline toll-free at 1-877-803-4622, or by mailing a check or money order payable to “IOCC” (include “China Earthquake” in memo line) to: IOCC, P.O. Box 630225, Baltimore, Md. 21263-0225.