Wednesday’s 16-cent jump in gas prices at Omaha stations may not be the last price bump at the pump we’ll see this month.
Retailers haven’t yet passed along their full cost from the recent rise in crude oil prices, said Rose White, a spokeswoman for AAA Nebraska.
The national average for a gallon of unleaded gasoline was $2.806 on Thursday, according to AAA, Wright Express and the Oil Price Information Service. That’s about 7 cents more than a month ago and 12 cents above a year ago.
In Omaha on Wednesday, the price of gas with 10 percent ethanol jumped from $2.639 to $2.799 between the morning and evening rush hour.
Analysts think the price will keep rising, with some saying by an additional 5 to 10 cents by Thanksgiving.
It’s not a supply-and-demand problem, White said Thursday.
“Supplies are good,” she said. “And with the end of the summer driving season behind us, demand is flat. There are currently no major refinery or production issues that would cause a significant upswing in prices.”
Most analysts blame the price hike on the Federal Reserve’s $600 billion economic stimulus effort.
Oil prices are closely linked to what the U.S. dollar is doing, said Denton Cinquegrana, a New Jersey-based analyst at the Oil Price Information Service.
For weeks, the dollar has been getting weaker against other currencies, and it probably will fall further as the Fed pours more dollars into the economy.
Oil is priced in dollars and becomes cheaper for holders of foreign currency when the dollar falls. Europeans, for example, get more dollars for their euros and can buy more oil for fewer euros. Since oil is cheaper for them, they buy more, sending up the dollar price of oil.
Energy traders expect this to happen, so they buy oil when the dollar falls, boosting the effect.
Benchmark crude for December delivery rose by $1.80 Thursday to settle at $86.49 a barrel on the New York Mercantile Exchange.
When the dollar weakens, investors would rather hold hard assets like oil and other commodities because hard assets protect them against more weakening and inflation.
The likely outcome for consumers will be higher prices at the pump and for basics like food.
Short of a catastrophic event, Cinquegrana said, he didn’t expect oil to hit $100 a barrel.
“When this dollar bottoms out and starts going up, you’re going to see oil (prices) fall,” he said.
This report contains material from the Associated Press.
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