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
656Comments
Aug 22, 2012 5:49PM
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Any oil that is produced in this country should be required to stay in this country we sell millions from Alaska to Japan.  We have all kinds of oil here but its all about greed. 
Aug 22, 2012 5:48PM
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Am I the only one tired of hearing different excuses when the gas prices go up?  I've heard more excuses than a cheating spouse coming home late.  If it's not oil speculators, then it's the weather, corn crops, Obama, Bush, Romney, dandruff, pet population, vd, gangsta rap etc.  enough finger pointing already.

Aug 22, 2012 5:36PM
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It is very Simple! Gas Prices Rise because of Greed! Nothing more, nothing less! Pure Greed! Speculate all you want to, but here in North Dakota, we learned that there is more Oil, & Gas in the Bakken than all of Saudi Arabia! That's right, and the Oil Exes are keeping it a secret as they build more oil containers to store all the oil and they only want to build more pipe lines to export the oil. PERIOD! they are going to build a diesel refinery, but not a Gas(Unleaded refinery) they want to support their trucks only, and no ones else. How UNAMERICAN is that? talk about Mafia, and communists tactics! Such a shame and disgrace for Americans, and those fighting for their freedoms. Some day when all is going to hell take notes people! GREED!
Aug 22, 2012 5:34PM
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Quit allowing oil companies to reap huge profits by forcing them to lower prices. Limit the percentage of profit they are allowed to make on a barrel of oil.
Aug 22, 2012 5:23PM
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TOO many people (with vehcles in the world), that's the problem, no it's IRAN, that's the problem, no Israel, that's the problem, no it's Obama, we are sure,  no, Saudi's are the real problem, no it's supply, NOT demand, we need to drill everywhere, no wait a minute, it's got to be Romney, now we are on to something, just wait till he gets in we will get on him right away !  NO, LET'S ASK HIM NOW-- WHAT IS THE GRAND PLAN FOR THE FUTURE MITT ?  Wait, the heck wtih the oil prices we need to ask about jobs and how to get all the jobs back from China that went over there the last 30 years ! And while we are at it will you close the borders Mitt? This is drugs, illegals loading the medical system and crime ifiltration BY the cartels. Awww heck forget it- -   NUTHIN IS GOING TO GET RIGHT ! 

Aug 22, 2012 5:02PM
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If the refineries are down and not producing wouldn't there be an excess of oil somewhere,so if demand for crude is down how can it go up 27%   smells fishy
Aug 22, 2012 4:59PM
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We as a nation are now a oil exporting country I was in Long Beach, Calif three years ago. Long Beach has a lot of oil wells (google signal hill for example). Most of these wells were shut down. Another thing, Mr. Obama stated that that canadian tar sand oil would be exported.

This summer I was back there. All of the pumps were going fill tilt. They must have magically found more oil. The other thing I noted was there were 7 empty tankers off shore and an eight that was being loaded. Could tell because the water line kept getting lower in the wate each day. There were also barges tied up to the side of this tanker. Also, it should be noted that it was not Romney, but that darling great communicator (Regan) that started this mess when he allowed the big oil companies to start merging (think EXXON/MOBILE,BP/AMACO etc).

And, since the 80's we have had at least one oil well, or oil refinery fire each year. This year we had 2. OIL COMPANIES HAVE ALSO SHUT DOWN AND REDUCED OUR refinery output each year.

Aug 22, 2012 4:51PM
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MSN fanning the flames of class warfare.  Look at the comments.  How predictable.
Aug 22, 2012 4:46PM
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Vote for Berry again an pay $10.00 a gallon,have a good day,walking.
Aug 22, 2012 4:42PM
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obammy is too stupid to figure out that the economy may actually have something to do with the upcoming election.  He is stupid like the devil himself...............

Aug 22, 2012 4:32PM
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Government this, regulation that. Take responsability for your own actions. You bought a gas guzler and wonder why you pay so much for gas? Supply and demand? Keep driveing around getting 12 miles to the gallon and blaming everybody but yourself for high gas prices. You do realize gas isn't manufactored and that we will one day run out right. Gas prices will never go down like they used to be because the worlds demand is riseing and the supply, day by day, is becomeing less unill we eventualy run out. Control how much YOU pay by buying a more fuel efficent vehichal.
Aug 22, 2012 4:29PM
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Are Wall Street speculators the so called experts this article refers to?  The time has come for the American people to rise up against speculative trading in all energy and food futures.  These items should be totally regulated by supply and demand.

Aug 22, 2012 4:27PM
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Why don't you just tell the truth. Gas prices are higher because the oil companies need to make new record profits so they get their year end bonuses. They keep contributing to all the politicians so they keep their mouths shut.

Plain and simple.

Aug 22, 2012 4:24PM
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The ignorance displayed whenever oil is mentioned by an article is breathtaking.  Forget all the "evil speculators" and the oil companies (thank them, they are bringing the product to you).  Speculation about the Strait of Hormuz being the flash point in the supply of oil to the world is misguided.  Think Ras Tanura.  Most all of the oil from Saudi Arabia snakes across the desert to the huge tank farm at Ras Tanura and is then piped underwater to the oil tanker loading station in the Gulf.  It would be fairly easy for Iran to take out this facility and completely tank the world's economy for a long time.  All the hogwash about "evil speculators" and oil companies keeping oil prices high for youall pale in comparison to the likely coming events in the mideast.  The sanctions or Israel attacking Iran's atomic bomb facilities will cause the crazy Islamists in Iran to act.  Oil prices will continue to track upward and could spike dramatically if Iran acts.  Think $10 gas if you can find it.  Cheers.
Aug 22, 2012 4:23PM
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the rich have always ****ed the poor always have always will.
Aug 22, 2012 4:13PM
Aug 22, 2012 3:57PM
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If you want to spend less on gas quit buying SUV's that get 12 miles a gallon.
Aug 22, 2012 3:56PM
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Another year, more pissing and moaning about gas. Such is life in America.

 

Here's an idea, use less! Doesn't make much sense to drive yourself to work in that Suburban now, doe it?

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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