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
655Comments
Aug 21, 2012 5:43PM
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When Bush was pres. all you libtards were saying high gas prices was because of him. So why does king obama get a pass from you all?? Just wondering.
Aug 21, 2012 5:51PM
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"Why gas prices will keep rising"


Because there's MONEY to be made...greed isn't simply going to go away.
Aug 21, 2012 6:25PM
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I'm going to get a damn horse. That way my grass will get taken care of, I won't have to worry about DMV and I won't have to worry about those damn speed trap cameras.
Aug 21, 2012 5:46PM
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And why can't we fend for ourselves and drill out west?  Why depend on other countries for our oil. One facility has a fire and all the prices go up.  Someone gets a flat tire, gas prices goes up, someone doesn't like the weather, gas prices go up.  I'm kidding but any excuse. Why raise prices when insurance pays for the damage to the refineries.  Another excuse.   Next time when Cheveron or anyone else has an issue where they raise prices so their CEO etc. receives nice bonuses, we should boycott.     Lets drill and stay independent. We have all this oil in Alaska, Canada and in the Pacific.   I'm not sure, but wasn't Russia going after the oil offered to the US by Canada which we turned down?
Aug 21, 2012 6:54PM
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Since we produce plenty of oil and other resources here in America. We need to stop shipping most of of our oil to differant countries. The president should make our oil companies keep enough oil here in America and freeze gas prices at $2.00 a gallon it could be done but there's to much money to be made by greedy ceo's and such.......I know wishful thinking........GO GREEN .......YA RIGHT!!!!!!!
Aug 21, 2012 7:03PM
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better wake up people, the government is slowly putting everyone in poverty, last stop will be a concentration camp!!!!
Aug 21, 2012 5:31PM
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So we went into Iraq...so why are we not getting free oil?  Also, we have all that oil in Alaska and we do nothing with it...heck with the stinking polar bears!!!  Let's fuel our economy...this impacts EVERYTHING in our economy and allowing the pice to be messed with because of the nutjob in Iran or evironmental concerns is foolish.  People are struggling to pay bills and get jobs so let's focus on people first...
Aug 22, 2012 8:56AM
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In 2008, oil was $140/bbl and gas was $4.30/gal.  Now oil is $93/bbl and gas is $3.60.  Seems to me gas shoud be about $2.86 right now.  Perhaps the EPA should permit the building of some additional refineries which would be cleaner, more efficient and more economical than the old ones.  Then we could realize the savings from the reduced oil prices.  Obviously, the people hurt the most by the current policy are the middle class - the same people who are always hurt the most when the government has too much power.

Normally West Texas crude sells at a premium to Brent but Brent is currently selling at a premium because we don't have enough refining capacity to take advantage of increased oil production. 

Aug 22, 2012 11:40AM
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what a foolish waste of time this article was....the reason why gas prices are high and will stay high is because of greed! If you believe anything else you are a moron. Greed and power have already ruined this planet, now we must live with it.
Aug 22, 2012 8:24AM
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I am so sick of these high prices.  Especially when you see record profits by the oil companies.  They could keep the price down if they really wanted to but they got us right where they want us.  Everyone needs gas.  And the government saying inventories are low is not a surprise.  Obama has made it clear more than once he likes these prices.  It helps promote his alternative energy plan.  Alternative energy is good however most of America cannot afford it.  Only the rich.  He is out of touch in what the average person (lower and middle class) can afford.  But the department of energy which the president oversees, controls how much oil is bought from overseas.  Plus Obama has intentially prevented us from being more oil independant to again serve his own agenda.  So we must rely on overseas oil.  It's a disaster waiting to happen and I don't think we have seen the worst of it.  If he is re-elected God help us.  Plus gas prices control everything in this country.  It is the cause of everything going up from food to heating.  You name it, gas and oil are behind it.  Transportation costs are rising and so is everything else.  I know myself I have had to cut back on spending and cut out causal spending because of the gas prices going up.  Watch out....our recovery from the recession won't last long at this rate.  We will be doing an about face soon.

Aug 21, 2012 7:33PM
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Isnt it funny how every time gas prices are low for a while the american refineries start having so called accidents. It seems to me like these accidents are being provoked into happening. we all need to stop buying gas at the same time for about a week, then we can see how many "accidents" happen when they realize just how much money they lost in that weeks time.
Aug 22, 2012 9:51AM
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Gas futures . .Crystal Ball of gas???? What a bunch of crap!! It's the stupid Oil Companies and those who are tied to them for big profits. There is NO oil shortage, and there is NO problems at the refineries like they have suggested. This is plain ol all American GREEEEED! No other industry gets by with this type of bogus speculation for the future. What a bunch of non-sense. . . . We need regulations and that's all we need, but first we need to get all those former business exutives out of the government!!
Aug 21, 2012 7:54PM
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What's causing the price of gas and oil to rise when it should be lowering, is the same ones in 2008 that caused it to rise the speculators.   They are artificially raising the price for a profit,  what needs to be done is they need to be taxed on those profits at a rate of 200%.
Aug 21, 2012 6:26PM
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i think the gas prices is a crock of s%&t
Aug 22, 2012 8:49AM
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Here's the real reason...

 

Corrupt media and corrupt traders = manipulation both up and down.

 

Nothing to do with supply and demand

 

 

Aug 21, 2012 8:25PM
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Every politician has a company gas card that we are paying. We the middle class bust our a$$ and the lower class unfortunately get overnment aid. Pittiful!
Aug 22, 2012 11:59AM
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Why is the price of gas rising?  That is easy.  It is called GREED.
Aug 21, 2012 11:26PM
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its all about greed

the price of gas up every time they think there might be hurricane,a war .a refinery fire etc . the price sky rockets over night.

then lo and be hold no hurricane no war and fire was some guy sets a waste basket on fire.

but the price of gas does not go down. if these thugs can raise gas that fast,the they can lower it just as fast.

Aug 21, 2012 11:50PM
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Price is going to rise because of speculation. The speculators should be jailed.
Aug 22, 2012 12:58AM
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I love how just a month ago there was an article saying how gas prices are dropping and may do so through November!
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