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Drivers Wonder Where Price Of Gas Will Go Next

Filed by KOSU News in US News.
August 16, 2012

If you plot out a chart of 2012′s average gasoline prices, you get what looks like a roller coaster. There’s a steady increase from January to April, the spring peak around $4 per gallon, and then a steady decline in May and June.

By the beginning of July, the national average was hovering around $3.42.

But since then, that roller coaster chart has been heading into its second big climb. Prices have been going up since July 1, and are now approaching $3.80.

So, many drivers are now wondering if we should soon expect to pay even more — or if we’re near the peak.

Tom Kloza, chief oil analyst for the Oil Price Information Service, thinks it’s a short-term problem.

“This is something you’ll have to put up with for a few weeks, maybe more if you’re on the West Coast,” he says. “But certainly not in the majority of the country.”

Problems In The Supply Chain

Two factors are driving the recent increases. The first, as expected, is the price of crude oil, which has risen to about $94 a barrel from around $80 in June.

The second factor is a bit more unusual — a series of problems in the nation’s energy infrastructure have created kinks in the supply chain.

“It’s the end of the summer. Refineries have been running hard, and running at high rates,” Kloza says. “And sometimes you get a cluster of breakdowns.”

A recent fire at a Chevron refinery in Richmond, Calif., was the biggest issue, but two Midwestern refineries also suffered equipment failures around the same time.

Due in large part to the Richmond fire, gas is already approaching $4 per gallon on the West Coast. The increase has been more subtle in places like Pennsylvania. So much so, that some drivers, like Marie Watson, who recently filled up her car at a Harrisburg gas station, haven’t even noticed it.

Three pumps over, Anna Nielsen has noticed the change, but says the increase hasn’t affected her driving habits.

“It’s just kind of something I deal with,” Nielsen says. “I’m really lucky, because I get really good gas mileage.”

But Nielson says she’d probably cut back on travel if gas tops $4 a gallon.

“My mom lives in Lancaster,” she says. “I probably wouldn’t go see her as often. My best friend lives in Philadelphia. So, I probably wouldn’t be doing as much of those longer trips.”

Relief In Sight

National driving demand typically starts to fall after Labor Day. So barring a major disruption in oil or gasoline supply, like a major Gulf Coast hurricane, analysts like Tom Kloza expect prices to start falling in mid-September, and stay down until the spring, when the whole cycle starts again.

“In the fall and the winter, there’s plenty of gasoline. We don’t drive as much,” Kloza says.

The shift from summer- to winter-blend gas in pollution-prone areas will also help bring down the cost as the temperatures start to fall. [Copyright 2012 WITF-FM]

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