Fill Up Quick! Gas Prices Going Up
The price at the pump may be on the way back up. GasBuddy.com Petroleum Analyst Patrick DeHaan tells WWJ Newsradio 950 that the price of regular could hit $3-a-gallon as early as Friday, due to the skyrocketing price of a barrel of oil.
"We are looking at wholesale costs that increased pretty sharply this week -- especially in light of a refinery in Chicago. Also, as a result of the Federal Reserve injecting money into the economy," DeHaan said.
"It's really up to the stations in how quickly we see this increase. Their wholesale prices increase every day, and if the stations may choose to absorb some of the increase to avoid the psychological $3-a-gallon mark," DeHaan said.
The national average for a gallon of unleaded gasoline was $2.806 Thursday, according to AAA, Wright Express and Oil Price Information Service. That's about 7 cents more than a month ago and 12 cents above a year ago. It will probably keep rising. Some analysts think the price could be a nickel to a dime more by Thanksgiving.
Higher gas prices have prompted consumers to cut back on discretionary driving, said John Gamel, director of economic analysis for MasterCard Advisors SpendingPulse.
It's similar to the trend in 2008, when consumers started conserving on travel as gas prices first rose above $3.15 a gallon and then spiked over $4 a gallon.
Still, that doesn't mean consumers will cut back in other areas. Holiday shoppers, unlike summer vacationers, have options such as buying online, said Kamalesh Rao, director of economic research for MasterCard Advisors SpendingPulse. In many cases online prices are lower than in stores.
Typically, about 10 to 11 percent of all retail spending is spent on gas in the winter. That rise to 15 to 16 percent in the summer when more Americans take driving vacations, Rao said.
In other Nymex trading in December contracts on Thursday, heating oil added 4.40 cents, at $2.3719 a gallon, gasoline gained 3.64 cents, to $2.1744 a gallon, and natural gas fell 5 cents, to $3.786 per 1,000 cubic feet.
In London, Brent crude climbed $1.55, to $87.93, a barrel on the ICE Futures exchange.
(Copyright 2010 WWJ Radio. All Rights Reserved. The Associated Press contributed to this report.)
