Gas Prices Continue Upward Climb
Gas prices spiked more than 75 cents between March of last year and the middle of June.
"Conditions are not dramatically different from last year, so we can expect a rise in gas prices in upcoming weeks," said David E. Parsons, president and CEO of AAA Carolinas. "North Carolina motorists should be prepared for gasoline prices to climb upward significantly as we approach the summer travel season."
Last year, gas prices were $1.89 on March 3 and peaked at $2.65 on June 20. North Carolina motorists faced an average five-cents-a week increase over a 16-week period heading into the summer of 2009.
Now the average price for a gallon of regular unleaded gasoline is $2.68, up three cents from a week ago. Gas prices have been relatively stable with a five-cents-a gallon range during the past month, similar to the experience in February 2009.
During last year's price run-up, several factors affected the price of gasoline at the pump, according to AAA:
n Refineries performed spring maintenance and switched over to their summer blend of gasoline, restricting their output.
n Oil prices were rising on the heels of a positive outlook in global demand from China, the world's second largest consumer of oil in the world.
n High unemployment and troubles in the banking industry led to a weaker dollar, prompting greater investment in oil commodities.
n Sporadic positive economic news, such as increased home sales in February 2009 and a large jump in consumer confidence in May 2009, caused temporary price spikes.
n Threat of global unrest in Nigeria and North Korea led to fear of interruption in oil production, increasing the cost of a barrel of oil.
There are several key economic indicators that lead AAA to predict a historically traditional rise in gasoline prices this spring, although the rise may be more muted than in the past. Factors working to keep prices down include:
n Unemployment and underemployment is still very high and may keep U.S. consumer demand for gasoline lethargic.
n Crude oil inventories are still high, around 337 million barrels, which can be refined to make gasoline and keep from paying higher prices for new supply.
Working to keep prices up:
n As the economy improves or predictions escalate for improvement, prices for oil and gasoline, will rise.
n A few refineries around the country have temporarily shut down production for maintenance or other various reasons, thus reducing gasoline production.
n Oil futures for April are trading higher, indicating investor optimism in oil prices, thus driving the cost of a barrel of oil upward.
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