By Mark Huffman
ConsumerAffairs.com
May 13, 2009
Gasoline prices are still a lot lower than they were this time last
year, but make no mistake, they're quickly moving higher. The daily
AAA Fuel Gauge Report shows the nationwide average of self-serve
regular has surged to $2.267 a gallon, a dime higher than five days
ago.
A month ago motorists paid an average of $2.05 a gallon.
The reason behind the recent spike is not exactly a mystery. Commodities traders, who bid the price of oil to as high as $147 a barrel last summer, have become convinced that the global recession will end much sooner than expected. With a return to economic growth, there will be a greater demand for energy.
Crude oil prices have steadily risen on mercantile markets around the world and are quickly closing in on $60 a barrel. The market price for gasoline has also risen sharply, helped by the fact that U.S. inventories of motor fuel, which swelled during the first three months of the year, are falling again, now that consumers are driving a bit more and refineries are running at only 80 percent of capacity.
The Energy Information Administration this week predicted that oil prices would average between $55 and $58 per barrel for the second half of 2009. If that were to be borne out, gas prices this summer would stay about where they are now, averaging about $2.21 per gallon nationwide.
In its latest weekly report, Wednesday, the EIA said both crude oil and gasoline inventories in the U.S. declined in the latest week. That surprised many analysts, who predicted that stockpiles would rise slightly.
For the week of May 8, crude oil inventories fell by 4.7 million barrels to 370 million barrels. That's still significantly higher than supplies on hand at this time a year ago. Supplies of gasoline fell by 4.1 million barrels, 208 million barrels. That's slightly lower than gasoline inventories a year ago.
The report served as a cue for oil traders, who pushed prices higher.
