Energy futures spike, but pump prices still flat

Holiday travelers can expect gasoline prices to remain steady into the New Year even though energy futures spiked Wednesday on a big draw down of crude and gasoline supplies.

Energy experts were expecting the amount of crude in storage to fall, mostly because refiners empty their tanks at this time of year for tax purposes.

But crude fell by 5 million barrels last week, more than twice what was expected. Gasoline stores fell more than expected and demand figures are rising somewhat.

On top of that, the amount of crude being imported into the country fell to the lowest level since 2003, news that gave energy markets a jolt.

That could play out in several weeks at the pump, but only if those futures prices can be sustained. Many energy experts do not believe that will happen with the winter travel likely to slow after the holidays.

The amount of crude, gasoline and distallates on hand are still above normal levels.

Gasoline prices have been hovering around $2.60 per gallon for weeks now as oil has traded close to $75 a barrel.

Prices at the pump were essentially flat overnight at $2.584 a gallon, according to AAA, Wright Express and Oil Price Information Service. That puts pump prices in the middle of their five-year average, even accounting for the giant swings in 2008 when prices were as high as $4.11 a gallon and as low as $1.61, according to government data.

How much people travel can be more about confidence in the economy than pump prices and last year at this time the economic crises was in full swing.

AAA says the number of people traveling is on the rise, a sign that consumers are growing more confident, even if slowly, about the economy.

"There is some evidence that demand has picked up," said Andrew Lebow of MF Global.

Still, compared with past years demand for fuel remains very weak. Other factors, like the weak U.S. currency have kept energy prices elevated.

Because crude is priced in the U.S. currency, investors holding other currencies like the euro can buy more crude when the dollar falls.

Even before the U.S. Energy Information Administration released its weekly supply report Wednesday, crude prices were rising as the dollar fell.

Benchmark crude for February delivery rose $2.27 to settle at $76.67 on the New York Mercantile Exchange.

In other Nymex trading in January contracts, heating oil rose 6.32 cents to settle at $2.0118 while gasoline gained 7.78 cents to settle at $1.9666. Natural gas rose 10.6 cents to settle at $5.821 per 1,000 cubic feet.

In London, Brent crude for February delivery rose $1.53 to $74.99 on the ICE Futures exchange.