Why gasoline prices will keep rising
The futures market points to more increases, and refinery accidents have hampered US production.
That's because gasoline futures -- a crystal ball for gas prices -- have spiked 19% in the past two months, The Wall Street Journal reports. That has helped trigger the price increase at the pump, though so far gas prices have risen only 7.2% in the same period.
Because pump prices follow futures action by several weeks, "drivers have yet to feel the full extent of the recent rally," John Biers and Dan Strumpf write.
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There are two more reasons to suspect gas prices will continue rising. Crude oil futures are up 27% from late June, and accidents at several U.S. refineries have dented production. Chevron's (CVX) refinery in Northern California, for example, is at 60% capacity after an Aug. 6 fire, Bloomberg reports.
Gas is averaging $3.72 a gallon in the U.S., according to AAA's Daily Fuel Gauge Report. That's up from $3.70 a week ago and $3.47 a month ago. The Energy Information Administration pegs this week's figure slightly higher at $3.74 a gallon.
The administration says gasoline inventories are at their lowest level for this time of year since 2008, Bloomberg reports.
"I don't expect any relief in gasoline prices until after Labor Day," independent fuel consultant David Hackett told Bloomberg.
The uptick in fuel prices may be a factor as families plan their end-of-summer vacations. Plane ticket prices are going up, led by Southwest Airlines' (LUV) fare increase on short one-way trips. Delta (DAL) and other rivals appear to be following Southwest's lead. If successful -- and it looks like it will be -- the increase will be the fifth time this year airlines have been able to raise prices.
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its easy to get cheap oil stop buying it from the middle east. south america, alaska, russia and right here in the US there is oil everywhere, they only buy some of it from middle east so they have an excuse for the high prices, what do they actually import 10-20% from middle east. the rest is from oil companies own oil wells over here. anytime gov. gets invloved in something the prices go up. cuz they are paid off by the oil companies to keep it that way.
In 1999 a republican senator inserted 289 pages into a bill that was drafted by a BIG BANK, OIL COMPANY and TWO BILLIONAIRE BROTHERS from KC. In this 289 pages allow everyone to bid on oil futures - so you went from 2 bidders that was allowed by law to over 200 bidders because of this law. If you had a house and over 200 people was interested what would happen with the price? For the people out there that can't think for themselve, the price goes through the roof . THIS IS WHAT IS HAPPENING WITH OIL. IT took both republican and Dem to pass and a Dem Pres to sign it. So stop this Divide and Conquer mind set - through out both parties.
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