The Daily Item, Sunbury, PA

News

February 22, 2013

'Perfect storm' pumps up gasoline prices

SUNBURY — Gasoline prices in the Valley have skyrocketed by about 30 cents a gallon over the past month, and it’s not over yet, said Gregg Laskoski, a senior petroleum analyst with GasBuddy.com, a website that tracks prices at the pump.

While prices in Union, Snyder and Northumberland counties have leveled off over the past few days at $3.85 a gallon, up from $3.79 a week ago, it’s only a brief reprieve.

“Prices will start rising again,” Laskoski said, “which is typical for this time of year, through April. I’m not surprised at what I’m seeing, but I am surprised it’s coming early.”

The culprits: Rising international crude oil prices, a weakened U.S. dollar and the slowing output at refineries that are undergoing maintenance in preparation for preparing their summer blended gasoline.

East Coast refineries are running at 72 percent capacity, Laskoski said. Compare that with December, when those same refineries ran at 91 percent capacity.

These are the kinds of things that push gasoline prices higher every spring after what is normally a lull in the late fall and early winter. But a heavy schedule of January maintenance at West Coast refineries has led to sharply higher prices there. Meanwhile, low inventories have pushed prices higher on the East Coast.

“Commodity traders also have to take part of the blame,” Laskoski said. “Oil futures are being traded up. Add that to a weak dollar, which is used internationally to buy oil, and you have the perfect storm for high prices.”

Hopes of stronger economic growth in the United States and abroad helped push the U.S. stock market to a five-year high in February and sent crude prices rising. When economies expand, more gasoline, diesel and jet fuel are consumed by shippers and travelers.

So far in 2013, gasoline has been cheaper than it was last year.

But that could change as stations continue to pass along the cost of their higher priced gasoline to drivers.

A convenience store manager in Milton — who asked that her name not be published because she is prohibited by management from speaking to the media —  couldn’t hide her frustration Thursday.

“I’m starting to see my regulars less frequently,” she said. “I don’t know how they do it. We all have to drive to work. But people are staying home more.”

The national average price has risen in nine of the past 10 Februarys.

Last year gasoline prices jumped 28 cents, or 8 percent, in February and averaged $3.55 for the month.

Still, Laskoski doesn’t expect prices to follow last year’s steep path through March that brought them to a high of $3.94 on April 6.

Crude oil supplies are high, oil production is booming and the economy isn’t growing very fast. Also, the tensions in the Middle East seem to have eased.

And as bad as it is in Central Pennsylvania, Laskoski said, be glad you’re not living in Chicago, Detroit or Miami.

“In those places,” he said, “drivers are really getting slammed. Their average price for regular gas is more than $4.30 and they’ve seen a 60 cents rise in gasoline in the last month.”

n Email comments to rdandes@dailyitem.com. GasBuddy.com and The Associated Press contributed to this report.

 

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