Local News

Prices At Pump Could Reach $3 A Gallon By Weekend

Posted July 6, 2006 7:30 a.m. EDT

— A variety of reasons are adding up to another spike in gas prices. Some analysts believe prices will rise by the weekend.

View Lowest Prices In Wake, Durham Counties

That news comes even though analysts said oil futures prices actually dipped 39 cents a barrel. Despite the slight dip in oil futures prices, there's still plenty of pressure at the pump.

International trouble and problems with shipping and refining along the Gulf Coast, along with record demand, are all potential reasons for the increase at the pump.

According to

AAA Carolinas

, parts of the Triangle are seeing gasoline on average for around $2.74 a gallon. The statewide average is $2.75 a gallon. However, some analysts believe gas could be as high as $3 a gallon by the weekend.

"I think it certainly could be close to $3. What we have had happen in the past couple of days, of course, is the big scare over North Korea. That apparently sent tremors through the oil market," said Mike Walden, an economist at North Carolina State University. "We have also had advance reports on job creation numbers for the nation, (which are) very, very strong, which would indicate strong demand for gasoline down the road.

Walden said oil market traders get nervous about any world conflict, including the recent incident with North Korea. With every missle that goes up, drives prices up. Despite rising prices, demand has skyrocketed.

"The last week in June set a record for gasoline purchases in North Carolina and the U.S., so once again we have a situation of strong demand for gasoline, big questions on the supply side, and that's the recipe for higher prices."

According to AAA, one million North Carolinians drove more than 50 miles over the Fourth of July weekend -- the most ever.

Many analysts said they thought high prices would drive demand down, but the opposite has happened. In the last week of June, U.S. and North Carolina gasoline demand hit all-time record levels.

No one knows for sure how high the price would have to go to cut demand. At current prices, many who drive for a living say they won't cut back.

"Not at all, because we have a lot of customers at our office supply (business) we have to service and we can't just stop servicing our customers, so we have to drive just as much as we did before," said driver Dick Kennedy.