Crude oil prices are trading near $68 this week, while gasoline and diesel prices have been moving higher for several weeks. Those trends have many consumers worried we’ll see price spikes similar to last year.
But analysts claim those worries are unjustified. They say the economic slack created by the recession all but guarantees prices won’t spike the way they did last year.
For much of 2009, there has been a glut of gasoline in storage around the country, keeping prices low. And demand has been light because of the poor economy.
But gasoline started jumping higher in May. Oil refineries, trying to make a profit like any other business, were taking in less oil because of the glut in gas, and those cutbacks showed up at the pump.
The federal government’s Energy Information Department reported the average price of a gallon of unleaded gasoline this week was $2.524, up 9 cents from the previous week. The price of diesel was $2.354, up 8 cents from the previous week.
Fuels prices may be jumping higher, but comparing them to last year may ease your pain at the pump. Gasoline prices are $1.45 lower than at this time last year, and diesel prices are $2.35 lower than last year. Crude oil, which was more than $110 per barrel last year, is trading around $68 this week.
But much like last year, analysts believe traders are an important influence on the market. “There’s no lack of gasoline right now or the lack of ability to produce it, and anyone who says speculators are not playing a role in this run is delusional,” says Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. —