Gasoline prices to keep rising for another month
By SARAH FAY CAMPBELL
Georgia’s state average price for regular unleaded gasoline has gone up 12.7 cents in the past week, and 33.3 cents in the past month.
And analysts expect prices to keep rising for at least the next month.
“I think we are going to see continued incremental increases over the next several weeks,” Laskoski said.
In Newnan on Thursday, three stations were offering regular unleaded for $3.35 a gallon, according to Georgiagasprices.com . Several other stations that typically have fairly low prices were offering regular unleaded for $3.45 a gallon.
A refinery fire in Richmond, Calif., has been in the news. Problems with a refinery on the other side of the country shouldn’t really affect Georgia. However, they do contribute to supply issues nationwide, and low gas and oil inventories are a big reason that prices have gone up.
In addition to the fire at the Chevron refinery, there is a Valero refinery in California that has been closed. “The Valero one isn’t getting much attention,” Laskoski said.
The two refineries have a combined capacity of 377,000 barrels per day. Losing that much capacity “is a big problem,” Laskoski said. “For now, that is contained to the West Coast,” Laskoski said. “But there are other supply issues,” including problems in the Mid-West and Great Lakes Region.
“Because they are happening at the same time ... collectively all of these things are putting stress on the supply side,” Laskoski said.
Even without those problems, the last few reports from the U.S. Department of Energy would have caused prices to rise.
“For a long time we were saying the supply is ample — up until about three weeks ago,” Laskoski said.
“In recent weeks, crude inventories have been down and gasoline inventories nationwide are down,” he said.
Part of the reason for that is, as summer comes to a close, some refineries reduce production of their expensive summer blend gasses. “Refineries at this time of the year are probably trying to draw down on their supply of summer blend,” Laskoski said. “Because the closer they get to October, that is when they can put into the market the winter blend, that is cheaper for them to produce,” he said. Refineries don’t want to “have excess summer blend left over,” he said.
The price of crude has also crept up, and is in the $93 to $94 range. Crude oil had dropped below $80 a barrel in late June.
Determining what is driving crude oil prices can be difficult.
“I think, in any given week, there is a different set of variables that can drive crude oil one way or another,” Laskoski said.
“But I do think the analysts are paying close attention to the Department of Energy’s weekly report. The last two weekly reports have shown, very clearly, that crude and gas supplies are in decline,” Laskoski said.
The situation with Iran “is always important, but there haven’t been any developments specifically related to Iran and Israel” lately, Laskoski said. “It’s obviously important to watch what happens with Syria, because Iran is a close ally,” he said. “There is nothing new” on that front, but “when there is volatility, any little thing can trigger nervousness in the financial markets,” Laskoski said.
“And that usually does not bode well for American consumers.”