Why gasoline prices will keep rising

The futures market points to more increases, and refinery accidents have hampered US production.

By Kim Peterson Aug 21, 2012 5:13PM
After a nice break at the pump earlier this year, gasoline prices are rising again. And they probably will continue to for some time, experts say.

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.

Post continues below.
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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Tags: CVXDALLUV
659Comments
Aug 22, 2012 3:47PM
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blame the republicans for the gas prices, and romney and his budie ryan, they are the ones who make the price of gas go up, they don't have to worry about anything thay have romney and ryan to raise prices , simply bcause they are idiots! how about their income taxes thathave never been filed, i would bet that gasprices would come down then if we authied all the republicans , and ou would find out why they are called elephants, simply put if you are a elephant you are a crook!
Aug 22, 2012 3:37PM
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Thanks for setting the tone for the corporations to jack up the price. American people have been tamed and do not know how to protest or take this kind of robbery to the government. Wait! Government works for the corporation, and not for her constituents... 
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Like it or not oil is a commodity. And we don't produce all that we need. The speculators think that the European economy is recovering and that foreign demand for oil will go up increasing its price.

Some will say increase domestic production but the truth is that would only be a temporary solution

If you believe in free market economics ultimately alternative solutions will be become economically feasible. Until that point in time the American economy will continue to  be hobbled by its oil consumption.

We are part of the world's economy and until we recognize that we'll flounder, placing blame instead of forging solutions.

Aug 22, 2012 3:36PM
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One reason in CA why gas is so high is that our environmentalist won’t allow new cleaner more efficient refineries to be built. Also, it would help if we had a national standard of gas so if a state like CA is low then we could buy it from another state but since we cant we are forced to pay the extra cost. Besides politicians don’t care about high prices, their gas tanks are paid for by OUR tax dollars.

Aug 22, 2012 3:31PM
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why is it that no matter what the subject matter, religion always comes up?  the price of gas has nothing to do with what god or person you believe in.  greed is now god of bussiness world.  the people in power (government) are getting rich while in office.  they have the best benefits in life for life paid for by the people they have screwed over while in office.  no matter what the government does or does not do, there is only one true way to hurt the oil companies.  stop buying their product!!!!  no boat riding, no week end trips nothing!!!!!  only drive as much as you have to.  fill up once a week or less if you can get by doing that.  then and only then would you see a drop in gas prices.
Aug 22, 2012 3:28PM
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Does anyone wonder why we have been unable to recover from a recession?  It's hard to spend, spend, spend when you've spent it all on gas.

But that's cool, as people switch to alternatives, the people getting hit the hardest are the ones who insist we drill baby drill.  

Alternatives might be more expensive, but factor in the increase of fuel over time, and you'll see a ROI a lot faster than you think.
Aug 22, 2012 3:21PM
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Alot of Idiots posting on here. Gas prices have nothing to do with the president and its not in his ability to do anything about it. Its these scum bag oil speculators that drive up the price of oil based on things that may or may not happen thus the term "futures". So these freaks see something thats going on in the world or think something might happen they hit the panic button and drive our gas prices up for no reason. These piece of $_it speculators are Americas true enemy! Anyone that is in this business should be on a list just like sexual offenders so that the American people can know where they live. Public hangings should follow.

Aug 22, 2012 3:20PM
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Of course it is because of futures in the stock market. This is what our government has become. Instead of playing the wheel in Vegas it is the entire country! Voters need to wake up, although the pickings for prez. this go round are slim to none, we have to make a change. Congress and the Senate sit back and play these games with us, the working people that have to pay the price, while we also pay for everything for them so it's no skin off thier noses if our families have to choose between food or gas to go to work!

And the media feeds it like a cancer, beefing it up every step of the way! Way to go MSN.

Aug 22, 2012 3:17PM
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Hmm, Lets see; several refineries closedl earlier this year plus "we" are selling distillates to foreign countries.  Maybe we are seeing speculation driving the price.  Where are the President and the fed enforcers?

Aug 22, 2012 3:09PM
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Do you remember how, just a short time ago, the public's tolerance ceiling on gas prices was supposed to be $3.00 a gallon.  Slowly the oil companies, and the government, have gotten us used to that ceiling being about $4.00 a gallon.  Most of us now long for when, and rejoice when, gas gets DOWN to $3.00 a gallon.  Take notice that as cars' MPG increases, gas prices rise to keep pace.  The fuel suppliers will have their record profits, regardless.   We are continually told that America has abundant supplies of natural gas and that it can be compressed into fuel for cars.  Honda, and some others, now offer models which run on compressed natural gas.  T. Boon Pickens bet gobs of money on natural gas production and use.  Why is our government not pushing natural gas production and use.  It seems to me that this alone could free us from OPEC.
Aug 22, 2012 3:04PM
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1st.  You could start with, stop making Corn -Gas-ethanol.  There is no reason to federally  fund farmers to grow corn for gas.  They currently drain tile every pot hole or water source.  They have tilled up natural prairie and virgin land and the Govt pays for both failure and expotential profits.  STOP that federal funding of our money to millionaire farmers.  

 2nd. Get the President to allow the new Keystone pipe line. "Supply & Demand" ( he will probably do it in early Nov. for votes, not for the right reasons)

 3rd., Stop over regulation of the oil and gas industry. " Too much Govt"

 4th, Put less emphasis on costly electric vehicles and put that effort into natural gas fed vehicles. 

5th  Put the brakes on the speculators who drive up costs and skim profits. 

6th Eiminate 50% of the EPA

Aug 22, 2012 2:56PM
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That is an easy question. Because Obama has done nothing to stop the rise in cost. All he has done is bankrupt the country.
Aug 22, 2012 2:44PM
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This is just another example how the American public is being manipulated. Both parties (Republican and Democrats) are now being bought and paid for by the wealthy and large corporations. We do not have a government that represents the people, but one that is more concerned with their own reelection by any means possible. They have set themselves up very nicely and are not willing to do what is needed to get this country back on track. Where else can you work for 4 years and walk away with a 100% retirement. They are not concerned about Social Security because they will not be the ones needing it. Health care in this country is a joke because our government officals have their own seperate health care package, which by the way we pay for. This country is going down the tube because "Power corrupts and absolute power corrupts absolutely." It is time for America to awaken and really take a look at what is going on not only in Washington, but with our state and local governments. If you believe that we have a government for the people and by the people, then you are just naive. Like many great societies before us, greed of the few will be the downfall of the many. 
Aug 22, 2012 2:40PM
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Bull pudding, it won't go down til after Labor Day, Of course not, they'll keep it high until the holidays are over and all the kids are back in school. It's just a rip off to rob the American people and every time gas goes up the economy gets worse. We have plenty of gas right here yet the government holds it and just rips it's citizens off. The politicans are just lining their pockets before they get booted out of the white house. Consumer spending is off now and will worsen as the holidays come if they don't get this under control. We are using less yet it's costing more. They asked us to use less so we now have millions of cars that are battery operated or assisted and the car makers are now building cars that use less gas and get better milage per gallon and yet the gas goes up and up. No matter what we do they will just charge more for the gas as people use less of it. Nothing we can do will change their theiving ways.
Aug 22, 2012 2:24PM
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Hockeydude777,

There is a pipe line it's called Burlington Northern. In case you haven't noticed there are mile long trains after train with brand new tank cars transporting this stuff. This pipe line is still being constructed in Oklahoma and will eventually will happen just not without have some safety standards in place. 

Aug 22, 2012 2:24PM
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GM built the second gen EV-1 in 1999 and it had a range of between 100 and 140 miles between charges and that's with 1999 nickel metal hydride battery technology.

There needs to be SOMEBODY to unite the American people into building an affordable electric car that gets 400 miles to the charge and costs no more than $18k.

Middle class families cant afford to pay 45k and up for an electric vehicle that only gets less than 100 miles on a charge.

If we unite and pool our resources, we could have another "AMERICAN MOTORS" ALL ELECTRIC vehicles and SCREW the rest of the world!!!!
Aug 22, 2012 2:23PM
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Some of  us are forgetting supply and demand. India and China are entering the 20th, if not 21st Century(!) and are catching up to the West in energy demands. As a result, energy prices are expected to rise because of fuel scarcity. You can only blame speculation so much for so long. I think it was author Dambisa Moyo("Winner Take All") on Book TV who pointed out that there is a newly discovered petroleum deposit in South America that could provide billions of barrels for decades. The bad news is that it''s under about 2 miles of salt. Not a cost effective source. That's what we're slowly coming to, difficulties in extraction. How long can we stay under $4 with this mounting demand and dwindling supply? We're starting to see some of the effects of post-peak oil with fees for whatnot in air travel and with manufactuing coming back, albeit "insourced." More to come(refer to "20 Dollars a Gallon" by Christopher Stine for possible scenarios in $2 increments, but no specific timetable except one proven wrong early in the book).

Aug 22, 2012 2:17PM
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Price fixing is a crime

 

taking bribes from big oil is also a crime

 

So why is Congress full of people?

Aug 22, 2012 2:16PM
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funny how allot of the posts point fingers at oil companies and spectulators, when will people realize its the mid-east countries milking the world?

 

drill in US and fk the middle east, let see how well they cope when 40% of the demand goes away

 

end the dependency

Aug 22, 2012 2:10PM
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Government along with big oil and speculators will keep oil high and going higher. I hope it does go to five bucks a gallon then maybe we can get a change in government that will do something for a change

like the keystone pipeline.

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