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.

More from Top Stocks

Tags: CVXDALLUV
659Comments
Aug 22, 2012 1:39PM
avatar
I don't understand why oil/gas is sold through futures.  Shouldn't these companies be forced to compete against each other to sell there products just like other business? 
Aug 22, 2012 1:39PM
avatar
As long as Congress is owned by the oil companies gasoline prices will always be out of line.  We have a President that won't do anything about either.
Aug 22, 2012 1:34PM
avatar

LETS SEE, 18 REFINERIES GO DOWN ON THE WEST COAST AND THE PRICE OF OIL GOES UP FIFTY CENTS. THE RICHMOND REFINERY AND TULSA REFINERY GO DOWN DUE TO FIRE AND PRICE GOES UP TO WHO KNOWS. WHERE IS THE LOGIC.

 

Aug 22, 2012 1:32PM
avatar
Unrestrained capitalism at work. Isn't it wonderful? But we want fewer regulations.
Aug 22, 2012 1:31PM
avatar
What a coincidence that there is always something that causes a spike just around the end of summer and labor day specifically.  Price fixing always has been and always will be as long as the oil companies are allowed to "speculate" for their own profit.  Too much money being donated into pockets of officials who turn their backs on the American people. 
Aug 22, 2012 1:24PM
avatar

I agree we need to have a capital gains tax in place for the oil companies. You would think if we have ashortage of refineries, they need to buld more. A few years ago, they cried about not making enough to cover expenses for "exploration" of new oil fields. Now they want to blame it on "damaged refineries"! When are the American peopl going to say, "enough is  enough"? Put leaders in office that will DO something about this corporate GREED!

 I also agree with telling these futures traders they have to store this oil they are buying. That would stop all this futures crap! 

Aug 22, 2012 1:13PM
avatar
Start a grass root action - go to a dealer and demand a low cost plug-in hybrid. The manufactureres will  realize that to make a profit they need to adjust their policy.
Aug 22, 2012 1:13PM
avatar
FREAKING RIDICULOUS.............
Aug 22, 2012 1:13PM
avatar
I have been sitting here trying to decide what to type without getting some heat, but all i really wanted to say is i wish punching a sheep square in the face was not considered assault but rather, looked at as an eye for an eye. They take my money, I do not have that power to take theirs so where is the equivalent exchange? A good solid punch to the face sounds good to me!
Aug 22, 2012 1:12PM
avatar
Simply, because the oil companies can!!!!!!!
Aug 22, 2012 1:11PM
avatar

I agree with most of these comments.  The government has his hands in all our pockets.  I am sorry to say this administration has not worked for the good of the people.  All those Senate Hearings they had with Gas Executive's were meaningless.

They may have worked for awhile, but they are right back gauging the people again.   There's always an excuse why prices

go up and up.    Vegetable and Fruit  excuse:  Weather conditions.  Gasoline - Fire at refinery so on and so on.  Yes, America it is

time for a change in our Administration.   Start with Congress and go up to the top.  Although, we don't have anyone running who will think of the people before himself and the wealthy.

Aug 22, 2012 1:10PM
avatar
What everyone is not seeing is that the largest reason for increase is just GREED by not only the oil companies but the stock market shareholders!!!
Aug 22, 2012 1:10PM
avatar

In many of my posts about Wll Street speculation I've said, "We need to raise the capital gains tax on speculation." The only people who profit are the oil companies and a few idiots on Wall Street.

I agree with  too 2u,. Buyers need to take possession of what they buy that will end al this speculation on futures crap. I'd like t see a Wall Street guy take and and find a place to store a 100,000 barrels of oil.

The oil refinery causing prices to go I'm not buying it. One refinery isn't going to raise prices that much. Lairs on that reason because Katrina took out more than one.... Now how much did prices rise then?

Aug 22, 2012 1:03PM
avatar
"after a nice break at the pump earlier this year"  What "nice break" are they talking about?  I don't recall gas being below 2.00 a gallon this year.  A nice break would be from the "futures" ****s that cause the pricing to go up every time they hear of an Arab taking a piss or when someone's corn crop may not be as good as expected or if a couple of world leaders disagree on the menu at a state dinner.  Too much money changes hands for this to ever stop or for the consumer to ever get a fair deal. 
Aug 22, 2012 1:01PM
avatar

 The skies the limit i suppose as 10% ethanol is now being talked about being dropped in 13 states.

  Now we not only have a nation wide drought but we have high gas prices to look foward too.

  

Aug 22, 2012 12:59PM
avatar
crude oil becomes, rude oil ITS ALL PROFIT FOR US STOCK HOLDERS ,WHEN I SEE A GAS TRUCK OFF THE SIDE OF THE ROAD WITH A FLAT TIRE,I THINK WELL THE PRICE OF GAS GOES UP TOO COVER THE LOSS, WHEN GAS TYCOONS SAY WE NEED MORE $$$$$$$$$ THEY RAISE THE PRICE PENNY BY PENNY AND MAKE BILLIONS $$$$$$$$$ STUFF THEIR POCKETS DEPOPSIT IT IN OFF SHOREBANKS. SORRY BUT THATS THE WAY IT IS.
Aug 22, 2012 12:56PM
avatar

Science amazes me! I heard that they have created a way to charge batteries on an electric vehicle, without pluging it in. A special plate lays in the floor and the car is parked over it, and the batteries are automaticlly charged. It made me think, why not build these plates into the highway system, and run the motors off it? I mean really, the transfer of electricity with out wire. That would eliminate the need for batteries. Like the ancient "streetcar" , without the electric pole contacting wire. LOL, the electric company would read your cars electric meter by satalite, just like your house meter, and send you a bill once a month. LMBO! Maybe the big oil magnate's realize the end is near, and are squeezing us for every last dime before it's all over. LOL, I gotta quit smokin this ****.

Aug 22, 2012 12:53PM
avatar
If the Oil Companies are not a monopoly,  why when a Chevron plant has a fire do all the oil companies raise thier prices?  It just proves there is no longer competiton between the oil companies.  This is why we as a country should not fund a pipeline that does not benefit America as the oil from this pipeline goes on the world market.  We will compete for our own oil.  Dumb americans!
Aug 22, 2012 12:53PM
avatar
So I read this as certain countries , Companies in individual take and gaze into a crystal ball...the fiuture... look as their minds decide and this is the price we pay for current gasoline..Hmm. This has been called Speculation. So oil and gasoline is speculative in nautre so who are these persons that decide our gasoline in the funture..Food for thought.
Aug 22, 2012 12:50PM
avatar

If you notice the prices go up with every article that is written saying it is going to go up for what ever reason. It is propaganda stimulated by the oil/gas companies and Wallstreet.  Actually it doesn't matter what product is written about-gas, food, propane- if they hint it is going to rise, it does, even if nothing comes about in the end and it never goes down.  And we sheep keep putting up with it. It is time to get rid of the good ole boys in our government and elect people who actually care about the rest of the population.  And think about it we keep electing people to presidency and senate, the same people who are already bought by big business. Wake up America!!!!!

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

105
105 rated 1
271
271 rated 2
420
420 rated 3
633
633 rated 4
492
492 rated 5
532
532 rated 6
725
725 rated 7
515
515 rated 8
343
343 rated 9
140
140 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
SWNSOUTHWESTERN ENERGY COMPANY10
TAT&T Inc9
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.