Oil expert: Gas prices set to spike this weekend
Thu, 23 Feb 2012 21:36:13 GMT —
An oil industry analyst with Gasbuddy.com is warning that drivers could see a 20 cent hike in gas prices over the next four days.
On the Grand Strand and Pee Dee, drivers are paying on average $3.48 a gallon of regular unleaded. That's up a penny since Wednesday and four cents since last week. It's up 25 cents since last month and 45 cents over last year.
"I expect stations to increase prices as much as 5 - 20 cents per gallon by the conclusion of the weekend with some stations starting to raise prices immediately," said Patrick DeHaan, GasBuddy.com Senior Petroleum Analyst in a press release.
DeHaan warns that a refinery fire in Washington state is boosting prices significantly throughout the entire West Coast region. Prices have also been reportedly rising fast in New England, Florida, and other areas on the East Coast.
Coastal Carolina University economist Rob Salvino said gas price increases have to be considered in two ways: short-term spikes and long-term trends.
In the short-term, prices could be effected by investors who see the economy improving, expect the demand for gas to go up, and decide to jump into the gas market to make a profit.
"From the speculative part of the market where this is traded, that could drive a very short term increase in the price that we might see wear off within a week or two," Salvino said.
There are other short-term impacts, too, he added, including political unrest in the Middle East and seasonal demand.
But Salvino said long term prices are going up as well. Gasoline is a traded commodity, he said, like corn or soybeans, and those things have shown a big increase over the years.
The cause for that is just the plain old cost-of-living. "A gallon of milk, a loaf of bread, which is two other different commodities, which also if you just thought about it and looked at your grocery bill and compared it to 1980, you'd be blown away, right? So inflation is at work there," he said.
It seems worse for gas, because we don't see signs along the road showing spikes in the price of milk or bread, but we do see big signs for gas, Salvino said. And we might be able to cut back or substitute away from other things, but we use gas every day.
"We can't just say, 'Well, I'll buy this other thing and put it in my tank this week.' That's just not gonna work. But with other products we can do that."
Salvino said you have to take a look back at the long term trend for gas prices in 2008. They were going up. Then the recession hit and interrupted that trend, so prices went back down. But now that the nation appears to be in an economic recovery, gas prices are going back up again.
So how do you prepare for a sudden spike in the price of gas? Some are planning to fill up quickly, before it goes up again.