Or, call me at: Ugh, gas prices are rising again. Unfortunately, we probably won’t seem them drop until the national average tops $4 to $4.50 a gallon in the coming months. You’re especially lucky if you live on the east or west coast; thanks to high gas taxes, you’ll likely pay much higher gas prices than your friends and family living in more inland states. Some Los Angeles residents paid nearly $5 a gallon this weekend. At those prices, it could cost a hundred dollars or more to fill up a truck, SUV, or large car. How much worse will it get for LA residents as gas prices continue rising in the coming months?
Paying more than 5%? Stop throwing money away! Click for a free rate quote.
From the San Jose Mercury News:Gasoline prices are rising at an almost unheard-of pace, and painfully so in California, where the cost for a fill-up now exceeds $4 a gallon in five cities and is approaching that dreaded mark in numerous others, including San Jose and Oakland . . . Some oil analysts predict $4.50 a gallon or more by Memorial Day on the West Coast and major cities across the United States such as Chicago, New York and Atlanta.
Ironically, gasoline demand has been falling, as Mike Shedlock pointed out a few weeks ago. Lower demand would normally mean lower prices, but unfortunately, other factors are contributing to rising gas prices. From the San Jose Mercury News:
Several California refineries have undergone the annual winter maintenance as the state switches from its winter to summer blend of fuel, slowing production and reducing supplies.
Two refineries near Philadelphia have been shut down, with a third closing scheduled for the summer. A giant refinery in St. Croix is also to be shuttered this month. And five refineries have closed in Europe after the owner lost its credit line and couldn’t fund operations. Europe typically exports gasoline to the U.S.
Geopolitics and increased demand from developing nations is also playing a role:
There’s more at play, including worries about Iran, which are a big factor in crude prices jumping. U.S. oil prices are hovering near $103 a barrel and global prices have topped $120, climbing to a nine-month high. The East Coast refinery problems mean U.S. gas prices will be tracking more closely with the global cost.
Plus, there’s increasing demand from China, India, the Middle East and Latin America.
Unfortunately, the days of $2 gas are probably long gone and never to return. Between higher demand in the developing world, a weakening dollar (oil is priced in dollars), and tensions in the Middle East, there are plenty of reasons to expect high gas prices for the foreseeable future.
Paying more than 5%? Stop throwing money away! Click for a free rate quote.
Pingback: Rising #Gas Prices: Some Florida Motorists Paying Nearly $6 a Gallon |