WASHINGTON, Oct 18 (AFP) - US gasoline prices at the pump topped two dollars a gallon Monday for the first time in four months, threatening to drive the American economy into another soft patch, analysts say.
Unleaded regular gasoline rose 0.8 cents to 2.005 dollars a gallon on average, according to a daily survey of more than 60,000 self-serve stations by the American Automobile Association, or AAA.
It was the first time the average price of US gasoline had pierced two dollars since June 11.
"The primary reason is record worldwide demand for petroleum products including crude oil and refined oil, and in particular the very high price for crude right now," said AAA spokesman Geoff Sundstrom.
"In fact, our expectation is that the price of gasoline will continue to drift higher if the price of crude oil stays where it is."
The record price for a gallon of regular unleaded gasoline is 2.054 dollars, set May 26, AAA said.
"I don't know if it is going to set a new record but certainly if the price of crude does not come down, gasoline prices will continue to increase at least for the foreseeable future," Sundstrom said.
New York's main crude oil contract, light sweet crude for delivery in November, hit a record high 55.33 dollars a barrel in electronic trading Monday but then slumped on profit-taking, declining 1.26 dollars to close at 53.67 dollars.
"The leap in oil prices in the past month has set up a possible replay of the soft patch as consumers are squeezed," said Citigroup chief North American economist Robert DiClemente.
Citigroup cut its estimate for fourth-quarter US economic growth to three percent from four percent.
Rising gasoline prices would likely constrain real incomes and spending noticeably.
Economic damage may be "significant," he said, despite reduced effects from higher oil prices because the economy was less energy-dependent than it had been in the past.
The prospect for sharp and immediate relief from high oil prices appeared limited, he said. Supplies appeared to be short, product prices were rising faster than anticipated and higher prices for long-term futures contracts appeared to weighing on business investment and hiring decisions.
Consumer sentiment appeared to be taking a hit, Wachovia Securities said in a report.
American consumer sentiment sank to an 18-month low in early October amid rising energy prices, a survey by the University of Michigan showed Friday.
A consumer sentiment index, based on a survey, slumped to 87.5 points -- the lowest since April 2003, when US troops entered Baghdad -- from 94.2 late September.
"Some of the decline could be due to the heightened attention on the upcoming presidential election (on November 2), with all of the debates concentrated in the period from September 30 - October 13. However, oil prices are also likely to blame for lower confidence levels," Wachovia said.