Lots of fuel for rising gas prices
What goes down must go up?
Analysts had been warning for some time that the recent historic drop in U.S. gasoline prices might end abruptly as the global oil market shakes itself out.
And sure enough, U.S. gas prices have been on the rise for over a month now -- for 35 consecutive days, according to the latest AAA Monthly Gas Price Report. AAA said the current climb is the longest streak of rising gas prices in over two years.
It noted that the nation's average gas price had reached a low of $2.03 per gallon on Jan. 26, after dropping for a record 123 straight days.
As of Monday, the national average price for a gallon of gas stood at $2.43, a rise of 13 cents over the past week and the largest one-week jump since the summer of 2013. But that national average is still over $1 per gallon less than it was this time last year.
"Paying $2 for gas will seem like a distant memory for most drivers in the coming weeks," AAA spokesman Avery Ash said in a press statement. "Gasoline remains much cheaper than in recent years, but drivers may not appreciate that fact given the steep increase in price over the past month."
Several factors are at work behind rising prices at the pump.
The historic drop in oil prices brought about by the North American shale oil and tar sands boom created a global oil glut. And while that was good news for drivers, those tumbling oil prices also cut deeply into the bottom lines of many oil-producing companies. In turn, they've been forced to cut jobs and suspend capital investments. Those cutbacks helped crude oil prices creep higher in recent weeks, which, of course, affects gas prices.
At the same time, this is the time of year when U.S. refineries briefly go off-line for seasonal maintenance in anticipation of higher gas demand during the spring and summer driving months. And that planned disruption means limited gas availability and a bump in prices.
Last year, from early February to the end of April, the national average price for gas rose by about 43 cents per gallon.
Another factor: an ongoing strike by United Steelworkers members at 15 plants in seven states, including a dozen refineries that account for about one-fifth of the nation's refining capacity.
"Gas prices likely will rise higher in March as refineries conduct seasonal maintenance," said AAA's Ash. "The good news is that most U.S. drivers should still pay less than $3 per gallon to fill up their cars this year."