Gas Prices on the Rise; Oil Costs Likely to Follow
By Patrick Giblin, The Modesto Bee, Calif.
Mar. 16–After a slight decline, gas prices have risen 9 cents per gallon in the past month, according to the latest survey from AAA of Northern California.
Pump prices have gone up even though the cost of crude oil has remained relatively stable during the same period.
But that’s probably going to change, some analysts said, because crude oil prices are expected to rise sharply in the coming months.
“Drivers are now paying an average price that is 27 cents higher than a year ago,” said Sean Comey, spokesman for AAA of Northern California. “And last year was no picnic.”
Four weeks ago, prices dropped an average of 8 cents per gallon, he said. In the past three weeks, they have risen 9 cents.
The average price for a gallon of regular unleaded in California on Friday was $2.57, Comey said.
In Modesto, the average price Tuesday was $2.45, according to the gas price tracking Web site ModestoGasPrices.com. That’s up 3 cents from Monday and up 7 cents in the past week.
Nationally, the average price on Friday was $2.36, Comey said.
Gas prices are rising because California refineries are switching production from winter to summer fuel, Comey said, and some are shutting down for routine maintenance.
Gas prices are expected to go higher because of rising crude oil prices.
Crude oil prices jumped $1.81 to $61.77 per barrel Monday over concerns that United Nations sanctions against Iran could restrict the oil supply.
Also Monday, President Bush accused Iran of helping the insurgency in Iraq.
Oil surged past $62 per barrel Tuesday because rebels in Nigeria have started a campaign of attacking oil pipelines, reducing the amount of oil that country can supply.
Gasoline futures increased 6 cents Tuesday to $1.80 per gallon over reports that Amerada Hess Corp. unexpectedly shut a gasoline-producing unit at a refinery in St. Croix, an island in the Caribbean, which it co-owns with Petroleos de Venezuela SA. A spokesman for the company said repairs could take up to two weeks.
The Associated Press contributed to this report.
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