Gas Prices Rise Eight Cents

Press enter to search
Close search
Open Menu

Gas Prices Rise Eight Cents

NEW YORK -- The average price of regular gasoline at U.S. gas stations rose eight cents in two weeks to $1.86 a gallon as refiners shut units for maintenance and repairs and the Organization of Petroleum Exporting Countries' (OPEC) output cuts, according to a report by Bloomberg News.

The price rose 4.3 percent, in the two weeks ended Jan. 23, according to oil analyst Trilby Lundberg's survey of 7,000 retail gas stations nationwide.

"The first reason gas is up is slightly higher crude oil prices," Lundberg said in a Bloomberg News interview. "Adding a little bit of impetus to that is demand is not hemorrhaging as it was."

Gasoline futures were buoyed in the past two weeks by a rise in crude oil as OPEC began to implement promised production cuts, Bloomberg News reported. Crude oil for March delivery rose $3.90, or 9.2 percent, during the past week to $46.47 a barrel. Crude oil accounts for 56 percent of the pump price, according to the U.S. Department of Energy.

U.S. refiners were operating at 83.3 percent of capacity in the week ended Jan. 16, compared with 86.5 percent a year earlier. AAA reported Monday that regular gasoline at the pump averaged $1.845 a gallon, up 3.2 percent from $1.792 on Jan. 11.

OPEC will curb supplies by 5.4 percent in January to 26.15 million barrels a day, according to preliminary estimates from consultant PetroLogistics Ltd. Starting this month, OPEC members with production targets, excluding Iraq, have a combined quota of 24.845 million barrels a day. The 12-member group needs to make the deepest supply reductions in its history to comply with the revised quotas, Bloomberg News reported.

Among companies temporarily shutting down refining and associated facilities for maintenance or repair were ConocoPhillips, BP plc, Holly Corp. and Tesoro Corp.