Spring To Bring Higher Gas Prices

The national average price for a gallon of unleaded gasoline is around $1.965, according to the motorist group AAA. This is bad news for the growing ranks of jobless Americans, CNNMoney reports. Though it’s still less than half the all-time high of $4.114 per gallon, achieved last July 17, 2008.

But since gas prices slumped to a low of $1.616 per gallon on Dec. 30, they’ve jumped more than 20%. At their current rate, prices could easily eclipse $2 per gallon. This is occurring as crude oil prices are trading well below $40 a barrel.

Ben Brockwell, director of data pricing for OPUS, said refineries lost money last year, despite the surge in gas prices. The refineries in the latter half of 2008 were paying top dollar for oil, and then producing gasoline in a low-demand economy, he said. Now, refineries are producing less, driving up prices in this low-demand economy, while stockpiling discount oil.

Gas prices are expected to keep going up, as they often do in late winter and early spring, when refineries traditionally conduct annual maintenance on their facilities, said Peter Beutel of energy risk firm Cameron Hanover. Although the silver lining for consumers is that because of lower demand, prices are unlikely to return to their sky-high levels from last year, analysts predict.