Gas Prices Jump 5 Cents in 5 days
The average price of a gallon of unleaded gasoline in the U.S. has jumped 5¢ since October 16. The sharp increase is directly attributable to the huge jumps in the price of oil (about $12 USD) over the last two weeks. The close of business on Thursday, October 18, saw a record price of more than $90 USD a barrel, although prices have since eased to around $88 a barrel.
Most analysts expect further short-term increases in the retail price of gasoline until the recent spike in oil prices is fully reflected in what consumers pay at the pump.
AAA says that drivers in the United States are paying an average of $2.81 a gallon for regular unleaded, $2.98 a gallon for medium-grade octane and $3.09 a gallon for premium gasoline. AAA compiles data from over 80,000 filling stations in the U.S. in order to come up with their national, regional, state and city pricing averages.
People in San Francisco were (of course!) paying the highest price at the pump; $3.17 for a gallon of regular gasoline. The lowest price in the country was in Newark, N.J., at $2.56 a gallon, and for those of you that have been in N.J. lately, you may remember 1) lots of “jug handle” traffic patterns, and, 2) the fact that there is no self-serve at gasoline stations, so that price seems even lower with that fact in mind.
Gasoline goes up when oil goes up. Will oil go higher?
The Bush Administration doesn’t think so, at least publicly. “It’s far too high and it would appear to be a reflection of inventories around the world,” said U.S. Energy Secretary Samuel Bodman to reporters Friday in Washington. “I’m hopeful that the exporters, both OPEC and non-OPEC, will take a hard look at it.”
Energy analysts are less optimistic. The U.S. dollar currently looks like a 98-pound weakling in the world currency markets and is still losing ground, fears of unrest in the Middle East have increased as of late, the appetite of developing nations like Russia, China, and India for crude oil keeps going higher, and now there are fears of a supply crunch this winter in North America. None of this will spur a reduction in oil prices anytime soon, and indeed, some analysts expect that we will see $100 a barrel by the end of November, if not sooner.
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