Gas Prices Expected to Inflate in Coming Weeks
MCLEAN, Va. -- Wholesale fuel prices are increasing sharply due to rising crude oil prices and a drop in U.S. supplies. This has yet to strongly affect prices at the pump, but will likely do so in the coming weeks, according to a USA Today report. While the national average for a gallon of regular gasoline increased four cents in the past week, it could spike by 15 cents or higher over the next two weeks.
"It's getting ugly,'' said Patrick DeHaan, senior analyst for GasBuddy.com. "First and foremost, the political problems in Egypt are driving crude oil prices, but there has also been a sharp drop in oil supplies the past two weeks. This is coming at a time when demand is at its annual July peak."
Recent political problems in the Middle East contributed to crude oil prices rising to 15-month highs this week. Wholesale gas prices have also risen 30 to 50 cents per gallon in some markets since late June, and 0.8 percent overall to $3.04 for mid-August delivery, according to the report. Retail gas prices are approximately 75 cents higher.
The national average has risen for four days straight after dropping for 24 of the 25 previous days. Midwest states such as Michigan, Indiana and Ohio have already seen steep price increases at the pump, up 16 cents in the past week with the potential to rise by even more.
"We may be on a rollercoaster for the rest of the summer," DeHaan said.
However, Francisco Blanch, head of commodities and derivatives research at Bank America/Merrill Lynch, labeled the price increases as temporary and not sustainable. "I give it a month," he said.