Updated pump prices

Once again, it's dog bites man time. The government's weekly survey shows that the average price in the L.A. area is $3.841 a gallon, up from $3.767 a week ago. Meanwhile oil prices show no signs of slowing, closing at $117.48 a barrel, up 88 cents. It's hard to wrap your arms around the idea that prices keep going up while U.S. demand for gas keeps going down. The explanations are complicated and often contradictory, but much of what's happening boils down to several factors.

1)Investors buy commodities like oil to hedge against inflation and the falling value of the dollar.

2)While worldwide demand is slowing, there continues to be growth from developing nations.

3)With little spare capacity worldwide, it only takes a small disruption in oil production to push up prices.

Here's more from the NYT:

In the United States, the combination of steadily rising gasoline prices and a sharply slowing economy has cut into gasoline consumption. As a result, demand for gasoline is headed for its first annual drop in 17 years, according to forecasts by the Energy Information Administration. American motorists are expected to consume 9.26 million barrels of gasoline this year, compared with 9.29 million barrels in 2007. While the decline — 0.3 percent — might not sound like much, gasoline demand typically increases 1 percent to 2 percent a year. In 1991, a year that the United States was in a recession, demand fell 0.6 percent to 7.13 million barrels. Gasoline consumption had risen every year since.