Gas prices inch upward
After four consecutive weeks of declines, gas prices reversed the trend, edging up yet again. In the last week, the national average for regular grade gasoline rose 5 cents to $3.44 Friday, yet prices are 19 cents below month ago prices. Prices remain 61 cents higher than year ago prices, yet 67 cents below the all-time high of $4.11 per gallon set three summers ago.
An upward crude oil trend sent prices above the $86 per barrel mark by mid-week came, due in part to a weakened U.S. dollar. A strengthened U.S. dollar and positive jobs data later in the week trumped crude inventory data and unraveled the commodity’s upward trend, sending prices down 1.6 percent Thursday to the lowest close since October 7. Though crude bounced back Friday on speculation Europe may be able to contain its debt crisis and that the U.S. economy will slowly begin to recover (increasing demand). At Friday’s close, crude oil settled at $86.80 for its second straight weekly gain.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks rose 1.3 million barrels, to 337.6 million barrels (a third straight increase and a 6.4 percent below year-ago levels). Gasoline stocks fell 4.1 million barrels to 209.6 million barrels (down 1.9 percent). Gasoline demand over the past four weeks was 0.7 percent lower than a year ago, averaging 8.9 million barrels a day.
“After several weeks of relief at the pump, motorists are now faced with the reality of a reversal of trend,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “Gas prices mirrored crude oil increases this week, ending a 4-week run of gas price declines. Motorists may want to fill up their tanks this weekend, as some analysts suggest gas prices will rise gradually over the next week or two, some rising as much as 10 cents by Halloween.”
As crude oil prices increase, so do gas prices. How long will they rise and how high will they do remain uncertain, however, analysts believe that as crude oil settles back in the $80 to $90-per barrel range gas prices will follow suit, crossing back over the threshold of $3.50 per gallon nationally and potentially increasing as much as 10 cents per gallon by Halloween.