Relief on the way from high gas prices
Posted May 6, 2011 2:27 p.m. EDT
Updated May 6, 2011 6:31 p.m. EDT
Raleigh, N.C. — Gas prices are up about $1 a gallon from a year ago, but relief could be on the way.
Experts say gas prices should start going down with the dollar’s value on the rise following a strong U.S. jobs report on Friday.
Gas pump prices fell for the first time in 45 days following Thursday's big drop in oil and gasoline futures. The national average for a gallon of regular stayed just below $4 per gallon.
The average price for a gallon of unleaded gas is $3.87 in North Carolina – up nearly 20 cents from last month.
Gasoline has probably peaked ahead of the summer, analysts said. Even after a hiring spree last month that added 244,000 jobs and put more commuters on the roads, analysts say that retail prices could decline to about $3.50 per gallon by June.
"The issue always gets back to market forces, making it jump up and down. So, it depends on how long it stays down to see how low prices go," said Gary Harris, executive vice president of the North Carolina Petroleum and Convenience Marketers Association.
Steve Byers' Marathon station on Lake Wheeler Road in Raleigh has already dropped gas prices by 10 cents. He said that, with every delivery, the price changes.
"Hopefully, that'll continue because there are a lot of factors that we definitely can't control," Byers said.
Some petroleum experts say North Carolina may not see much of a dip in gas prices because the end of May is when gas stations change over to summertime inventory. Gas costs more in the summer because it has to be refined more to meet state ozone requirements.
Gas prices have increased every day since March 23. It's been on an upward trend with oil over the past few months as the Libyan rebellion cut off that country's oil exports, the dollar fell in value and numerous refineries shut down due to power outages and other unexpected problems.
Gasoline prices also tend to rise every spring as refineries follow federal regulations to produce summer gasoline blends that are more expensive to make.
Andrew Lipow, president of Lipow Oil Associates in Houston, said problems with U.S. refineries have been resolved, and gasoline supplies should start to grow this summer as refineries get back into gear.
"Combine those extra supplies with still rather high gas prices, and you're going to see continued pressure on gas prices throughout the summer" to fall, he said.
Gasoline gave up a tenth of a cent on Friday, for a national average of $3.984 per gallon, according to AAA, Wright Express and Oil Price Information Service. Gas prices are still $1.06 more per gallon than they were a year ago. The average is also higher than $4 in 13 states and Washington, D.C.
The drop in gasoline comes after a week-long slide in oil. Oil has fallen about 11 percent since Monday amid growing concerns about the economy, a decline in gasoline consumption in the U.S. and a rising dollar. Oil is priced in dollars, and a stronger dollar makes it less attractive to buyers with foreign currencies, so prices fall.
Benchmark West Texas Intermediate for June delivery rose $1.27, to $101.07 per barrel, on the New York Mercantile Exchange. In London, Brent crude added $2.40, to $113.20 per barrel, on the ICE Futures exchange.
As gas prices soar, many Americans pin the blame on greed or a push for higher profits among oil companies, speculators and oil-producing nations, according to a Pew Research Center/Washington Post survey conducted April 28-May 1 among more than 1,000 adults.
Poll: Consumers blame greed for higher gas prices
About 31 percent of those surveyed offered a variation on this theme – greed, oil companies or speculation – when asked what they think is the main reason gasoline prices have gone up recently.
About 19 percent cited the ongoing wars or unrest in Libya and elsewhere in the Middle East as the top reason for rising fuel prices.
Another 14 percent attributed the rise to politics or national policies.
A little more than 12 percent blamed market factors, such as competition with other nations for limited supply or the approaching summer season.