Rising gas prices could be a drag on economic recovery
By
Frank Ahrens and Mike Musgrove
Washington Post Staff Writer
Friday, January 8, 2010
Increasing Gas Prices In USA
part - 2
The price of crude oil spiked sharply in April and has been steadily rising since, with light, sweet crude targeted for February delivery closing down slightly yesterday, at $82.66 per barrel. This was oil's first price retreat in the past 10 trading sessions.
The heavy snows and frigid temperatures across the United States over the past month have reduced gasoline demand, as people are driving less.
At the same time, however, the low temperatures have driven up all energy prices, including the crude that is refined into heating oil.
When oil closed above $82 per barrel on Wednesday, it passed through something known as a resistance level. In trader-speak, a resistance level is like a soft ceiling -- a price that traders do not expect a stock or a commodity to pass, at least not easily and not in the near term. When oil broke through the $82 ceiling, traders began resetting their price estimates for coming months for crude at $90 or even $100 per barrel. This can translate to $3 gas.
There may be some hope for drivers. A report from the government's Energy Information Administration on Wednesday surprised traders by saying that supplies of crude oil and gasoline in storage are actually growing. The amount of gas and crude pumped into storage last week was three times greater than forecasters predicted, the government said. If the commodity boom cools and the usual supply-and-demand relationship kicks back in, this could help stabilize gas prices.
Of course, rising prices at the pump can lead consumers to direct their ire at a familiar target: Big Oil.
"It's ridiculous," said Silver Spring's Joe Lamari, as he filled his tank at Freestate Gas, a cash-only gas station in Rockville.
On Thursday, he paid $2.65 per gallon; a few weeks ago it was $2.49. ("It was $2.58 just the other day!" interjected a man at the neighboring pump.)
Lamari chalked up rising prices to "manipulative" oil companies.
Gas Prices Part 1
It is November 20th 2010 and the prices for gas all over the USA are rising. Just in Time for Holiday Driving.
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