Gas rates reached a two-year high as of January 21. The law of supply and demand is driving the increase as the world consumes more oil and gasoline supplies have not kept pace. Analysts anticipate gasoline rates to continue upward, and United States motorists may pay $4 a gallon this spring. Individuals are likely to be getting payday loans just to fill up their gasoline tanks.
Average gas prices increasing
AAA accounts that on Jan 21, the national average for gas prices was around $3.12 a gallon. This average hasn't been reached in quite a while. In fact, Oct 2008 was the last time it happened. The region that you are in will heavily determine your gasoline prices too. This is because of state gasoline tax laws. About $2.74 was what Salt Lake City averaged. A bank loan is practically necessary for a fill-up in Honolulu, where it’s $3.58. Since Dec. 1, there has been a 9 percent increase within the average gasoline prices within the United States On Jan 1 though, the oil costs went down. With the New York Mercantile Exchange, crude for March delivery went down to $89.11. There are some nerves that oil speculators have currently. China's plans to cool the economic climate will be hard to fulfill since oil tends to be needed for it.
Economic recovery slowed with gas price increase
In the world, it’s expected by oil experts that less oil is being used than is being produced. In fact, there's about 5 million barrels more a day produced. The high gasoline rates are due to the oil speculators. They’re the ones to blame. A way larger United States economic climate is what is expected. That is what most hopes for anyway. It is probably not a very good thing for the gasoline costs to go up. The recovery may be postponed even longer. Cameron Hanover is an energy consulting firm. This firm explained that another $4 million is spent buying gas in the U.S. each time there’s a 1 cent increase in gas prices. Those who already have a strict budget may not enjoy the additional money that has to be spent. This is especially true considering there was a 12 cent increase in the U.S. last month on regular for gasoline prices meaning another $48 million was spent.
The 2011 year forecasts
Gasoline rates might get fairly close to $4 a gallon this spring. Oil speculators aren't the only thing effecting gasoline costs. Supply factors will also make a difference. Switching to summer automotive blends is something most gasoline refineries will be doing soon. That means there could be less production. Americans travel more within the spring and summer. This means more gas is used. OPEC might also choose to further restrict production to sustain the upward trend in the price of oil. Supply also has yet to recover from the drilling moratorium in the Gulf of Mexico, which the Energy Information said will cut oil production by about 120,000 barrels a day this year.
Articles cited
CNN Money
money.cnn.com/2011/01/21/markets/gasoline_prices_rising/index.htm
ABC News
abcnews.go.com/Business/wireStory?id=12731383
KING 5
king5.com/news/business/Petroleum-demand-up-gas-prices-could-follow-114364459.html
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