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Photo by Travis Pratt
Gasoline prices are on the rise after a long steady period. |
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A recent surge in crude oil prices has gasoline costs inflating. In the last weeks of October, the average U.S. retail price for regular gasoline jumped 14 cents per gallon, more than 5 percent. Nationally, the average cost of unleaded gasoline on Friday hit a high for 2009, at $2.70. Maryland's average Friday was $2.66, said Regina Averella, manager of public and government affairs for AAA Mid-Atlantic. Crude oil trading is also at a high this year, selling for more than $82 a barrel, according to AAA. "Crude oil prices have risen to the $80 per barrel level from the mid-$60s just a few weeks ago," said the Energy Information Administration's retail gasoline expert, Laurie Falter. Averella said the reason for the gasoline price spike is the increase in the price of crude oil, a primary component in gasoline. Crude oil trading remained in the $65 to $75 range for more than 11 weeks, keeping gas prices steady since August. In October, crude oil rallied by about $10 a barrel, despite weak supply and demand. The last time oil prices traded above $77 was in October 2008. Falter said the increase of crude oil prices alone would imply a 35-cent-per-gallon increase in gas prices. AAA said the recent rise is driven by a significantly weakened U.S. dollar and some evidence of economic recovery, when investors believed U.S. demand for oil and gasoline will soon rebound. "Crude oil increases are pushing up prices at the gas pump," Averella said. "Motorists are noticing the jump in prices over the last week. Should crude oil continue its upward climb and demand continue to increase, we are likely in for some higher prices yet," she said. Gas prices have risen only about 21 cents in the last three weeks, Falter said, but it takes up to eight weeks for price changes at the wholesale level to filter through to retail. "It is likely that we could see gasoline prices go up a bit more in coming weeks, provided crude oil and spot -- i.e., wholesale -- gasoline prices stay stable," Falter said. "Most indicators suggest oil may not go much higher than the $80 mark in the near future, barring any unforeseen events," Averella said. "However, if crude oil prices continue to rise and demand continues to increase, we could likely see higher prices yet."
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