Americans Shell Out More At The Pump For Gasoline
Drivers are reaching deeper into their wallets to pay for gas and some parts of the country are paying more than others. AAA's Daily Fuel Gauge Report finds the national average cost of a gallon of unleaded gas today is $3.57. But that same gallon of gas can cost as little as $3.04 in Wyoming or a full dollar more in California, at $4.02.
Prices are higher in California says the Los Angeles Times, because of maintenance work that's being done on refineries.
But the price trajectory is climbing, and they're swayed by increases in the cost of crude oil. AP notes oil surged about 2.6% in today's trading on the New York Mercantile Exchange, and cites nervous traders who are eyeing Iran's decision to stop exporting oil to Britain and France in the dispute over its nuclear program. Oil is now selling at its highest level since last May.
NPR's Rachel Martin points out historically, gas prices have risen above $3.50 per gallon just three times previously, and never so early in a calendar year. She spoke with energy analyst Phil Flynn of futures brokerage company, PFGBEST, who summarized why prices are soaring in winter:
FLYNN: Well, I think it's because it's happening at a time when demand is weak and at a time when normally gasoline prices go down. What's happening that's different this time is that we're seeing an unprecedented geopolitical risk in the price of oil. And more and more the price of oil has been driving up gasoline prices. Add to that the risks we're seeing in places not only in Iran but in Sudan or in Syria. All of these risk factors have been keeping the price of oil elevated. And that, of course, shows up at the gas tank almost immediately.
Flynn says if tension falls in the Middle East, oil prices could fall. But if tension increases with Iran, he predicts gas prices at $5 per gallon, at least for a short period of time.
The White House is aware of the issue; President Obama noted today Americans could use money they save from the extension of the payroll tax cut to afford gas, as Reuters says. Our pal Frank James over at It's All Politics examines the link between the cost of gasoline and presidential elections.