Latest News -

Fri, Aug 1, 2014

Fuel on 32-day increase, likely to remain

Comment   Email   Print
Fuel on 32-day increase, likely to remain | Gas Prices, Oil Prices, Economy, Business, Murfreesboro, AAA, Politics, International Relations, Stock Market

(File photo)
It’s time to open up those wallets, folks.

Gas prices are high, and they’re going to stay high, experts say.

Gas prices at the pump continue to rise and have now increased for 32 consecutive days – from a national average of $3.38 on Jan. 26 to $3.70 this week. Monday’s price is 13 cents more expensive than one week ago, 29 cents more expensive than one month ago, and 35 cents more expensive than one year ago.

According to AAA, motorists in three states currently pay an average of more than $4 per gallon: Hawaii - $4.32, California - $4.29 and Alaska - $4.09. Only two states pay less than $3.20: Wyoming - $3.12 and Colorado - $3.14.

Prices in Middle Tennessee fall between the two ranges at about $3.60 per gallon of regular grade gasoline.

The price of West Texas Intermediate crude oil settled at $108.70 Monday, which is slightly lower than last week, but not low enough to make a difference.

“Recent weeks have seen crude prices surge higher on geopolitical tension with Iran, signs of economic improvement in the U.S., and signs of progress toward addressing European sovereign debt concerns,” said Avery Ash, manager of federal relations with AAA, in an AAA Fuel Gauge Report Overview.

Ash explained how crude oil futures – oil prices that are determined based on future supply and demand – are priced in U.S. dollars.

“As the dollar strengthens relative to currencies abroad, the price of oil becomes more expensive for those holding foreign currencies. Oil futures become a less attractive investment, which exerts downward pressure on prices, as was the case (Monday),” Ash continues.

Despite only four trading days due to the Presidents’ Day holiday, last week’s increase in crude prices was the third largest since the start of 2009 and the largest since the first week of March 2011, when prices surged above $100 per barrel for the first time since 2008, according to Ash’s report. The price increase last March was driven by violence in Libya, as rebel forces clashed with those loyal to then-leader Muammar Qaddafi, and concerns persisted that this unrest would spread to other countries in the region.

“The recent price increase again has roots in unrest the Middle East and North Africa – current escalating tension with Iran and continuing violence in Syria – but has also been a result of positive economic reports in the U.S. and signs that the EU may be taking the necessary steps to address that region’s sovereign debt issues,” Ash said.

An improving economy overseas would be expected to consumer more oil, which exerts upward pressure on prices, explains Nancy White, director of AAA public relations.

“At the same time, when economies strength overseas, the U.S. dollar weakens, and the price of oil (traded in dollars) becomes relatively less expensive. Oil futures subsequently become a more attractive investment, which exerts upward pressure on prices, as was the case (recently),” she said.

Adding to concern by some traders that crude and wholesale gasoline prices may again be overbought is the continuing demand destruction evident in the market, Ash stated in a AAA Fuel Gauge Report Overview on Monday.

“While weekly Department of Energy numbers last week may have appeared to show a slight rebound and a new high for 2012 at 8.628 million barrels of gasoline consumed per day, this number was still some 500,000 barrels below consumption for the same week in 2011, and a look at the more telling 4-week average shows a more than 6 percent year-over-year decline,” Ash said.

Despite these now weekly reports of anemic demand, gas prices at the pump continue to rise and have now increased for more than a month straight.

Jessica Brady, a spokeswoman for AAA, also attributed the rise in gas prices to refinery closures.

“This is the time of year when refineries shut down to switch from winter-blend fuel to summer-blend fuel,” she said.

Winter-blend fuel is less costly for refineries to produce because it lacks the costly additives that are necessary for the high temperatures and summer-blend fuel.

As for the future of gas prices, Brady said, “At this point, it does look like prices are going to continue to increase well into spring. There doesn’t seem to be any real release in sight, at this point.”
Read more from:
Business
Tags: 
AAA, Business, Economy, Gas Prices, International Relations, Murfreesboro, Oil Prices, Politics, Stock Market
Share: 
Comment   Email   Print
Members Opinions:
March 01, 2012 at 8:18am
I honestly can’t believe that gas prices are still constantly going up. For some reason I had it in my head that this summer the prices would stay about the same or much cheaper. I am 20 years old now, when I first started driving four years ago, gas was right at $1.15 a gallon. It’s amazing that over time prices seem to sky-rocket. I am from Columbia, Tennessee and I drive to Murfreesboro three days a week for school and to LaVergne two days for my internship. I will have to say that I always fill up when I am up in Rutherford County though. Gas in Maury County is nowhere near as cheap as it is there. I never thought that I would say that $3.39 is cheap. It was definitely cheaper than the $3.59 in Spring Hill. I’m not sure why the prices of gas change depending on the region. I will say to all of you folks traveling or living in Rutherford County, it’s definitely not a bad idea to go ahead and fill up. I am worried about airlines as well as cars with this issue. The price of fuel is going up and so will airline tickets. Also, I don’t plan on going on any road trips anytime soon. It’s crazy how much gas is now. I hate to see what it will be this summer. The prices going up will be a major problem to people such as myself that commute at least an hour one way.
March 01, 2012 at 10:22pm
Being a junior at Middle Tennessee State University, I am worried about the rising gas prices. Even though I live in Murfreesboro, I still have to commute every day to campus. I am obviously already on a very tight budget, and am just now beginning to see how the prices at the pump are draining my bank account. And like I mentioned, I live in town about fifteen minutes from campus. I am lucky compared to some classmates of mine who live outside of Murfreesboro. They are having a much more difficult time paying at the pump. It’s stressful for students, as well as many Tennesseans, who live on very tight budgets and who commute every day to have to pay more than $3.50 for a gallon of gas. It’s even more stressful to think what gas prices will be like as time goes on because, it seems multiple factors are to blame for the rising prices at the pump. The unrest in Middle East is not something America can have much control over. And even though I find it surprising the improving economy is partly to blame for the gas prices, I am happy the economy is improving both here in the United States and in Europe. I just hope the gas prices at least plateau soon so we can continue to commute without having to skip out paying a bill or two just so we can get in our cars and go seomewhere.
March 02, 2012 at 2:01pm
When will enough be enough? I was so happy and relieved that gas prices were starting to go down at the end of last year. The prices were definitely making a difference in how much I pumped and how often. I am a college student here in Middle Tennessee and I am responsible of paying everything for myself including my gas. Although I do not commute to campus I do have a drive home to visit my family. I am lucky to live so close to campus that I can ride the public transportation offered. But my family does live about 2 hours away, so when I make that trip in my car it takes up a lot of gas. I use to be able to go home maybe every weekend but now that these prices are higher there is no way I can afford that. I can’t imagine how much more it would actually be for a student that commutes every day to class. It is absolutely crazy that in California and other big states a gallon costs up to $4.00. That is an exaggerated amount of money to have to pay to just get you from place to place. If these prices keep going up there is no telling when it will stop and how much the top price would be. Although our economy is getting a bit and I feel happy about that, it still doesn’t change the fact that a lot of our pockets still getting emptier.
March 02, 2012 at 11:00pm
I think it is universally agreed upon that gas prices are too high, but there is not much more to be done about them other than to complain. From my home in Murfreesboro, driving to school five days a week is about a five mile drive. However, anytime I want to go back to my hometown, it is a three and a half hour drive. That usually equates to about half a tank in my SUV. I do not like having to give up more and more money each time I fill up, but what can I do? I am now at the point where I either do not look at the amount at the pump when I drive away or fill up often as not to realize how much money I really am having to spend. I do make a point to fill up in Murfreesboro when I leave for the weekend and again in my hometown in MS before I come back. The gas prices in the two places tend to be similar. This is not the first time people have been up in arms about gas prices and I am sure it will not be the last.
Powered by Bondware
Newspaper Software | Website Builder