Hear We Go Again: Gas Prices to Rise
Many energy analysts, including those in the government, are predicting Americans will be paying more to fill their gas tanks this driving season than they did during last year’s record-high months, according to a report in USA Today."While prices are likely to fluctuate ... it appears that the trend over the next few months is upward," analysts at the Energy Department's statistical arm said in their most recent weekly report on petroleum, according to the report.Gasoline prices hit a record, not adjusted for inflation, on May 24 last year at $2.06 a gallon for regular. On Monday, the average price for a gallon of regular gas was $1.90, up 25 cents from a year ago. In California and New York, average prices already exceed $2 a gallon.Prices are rising even though gasoline inventories are considered to be in pretty good shape, being much higher than they were a year ago. Why?Demand: Strengthening economies in the USA and other parts of the world are expected to lead to continued growth in demand for oil and oil products, including gasoline.Oil: Crude oil accounts for nearly half of the cost of gasoline. With crude oil costs up 37 percent from a year ago and expected to remain elevated, the added costs will likely feed into gasoline prices, the report said.Uncertainty: Although gasoline supplies are solid ahead of the busy summer-driving season, there are still a number of uncertainties about oil and gas supplies. The Energy Department, according to the USA Today report, noted that there is some concern about how much gas Europe will be able to export this year. And questions about oil production in key producing countries in the Middle East, Venezuela and Russia will also likely lead to higher oil costs.