Two months ago, almost all predictions about gasoline prices were that they were falling and would stay down, or even drop more. Crude prices had fallen. Oil and gas supplies were abundant. Trouble with Iran did not look like it would block shipments of oil from the Middle East. Supply interruptions in the North Sea were short-lived. It only took a month for sentiment to change almost entirely.
Hopes that large governments will stimulate their economies and renewed worries about Iran have pushed WTI crude prices back near $100. Gas prices have risen most days in the past six weeks. As the Labor Day weekend is just a few days away, the price on average of a regular gallon of gas nationwide has risen to $3.730, according to measurements taken yesterday for the AAA Fuel Gauge. That is up from $3.716 a week ago and $3.485 a month ago. In some parts of the nation, gas prices have risen 10% in the past 30 days.
Drivers will pay a good deal more than they might have expected a month ago as they go on Labor Day trips. And, if money is as tight as most economist believe, these drivers will not be in a mood to spend when they return.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Oil & Gas