Steve Gravelle, CR Gazette –
The recent increase in gas prices is likely to continue through spring, but the demand isn’t there to keep prices in record territory for long.
“We’ll peak out about $4 sometime prior to Memorial Day, most likely, unless there’s some anomaly as far as a political or economic or environmental issue,” said Gail Weinholzer, spokeswoman for the AAA Minnesota/Iowa.
That would be near a record, and about what gas cost at the same period a year ago. Weinholzer noted prices followed a similar pattern in 2011, although a gallon of unleaded regular is about 30 cents more than a year ago, according to the AAA’s Fuel Gauge Report.
“That was primarily due to the ethanol tax subsidy coming off the books,” Weinholzer said. The end of the 45-cent-a-gallon tax break was felt mostly by drivers of E-85 vehicles. Regular gas is 10 percent ethanol.
Weinholzer expects prices to increase another 15 to 20 cents a gallon through the end of this month, when refiners switch to producing gas mixed for warm weather, and then to recede over the summer.
Despite high crude prices on the world market due to Middle East concerns, a continued weak economy means the demand just isn’t there to push prices much higher for very long, Weinholzer said.
“Crude oil was hovering about $100 a barrel, and domestic demand was not increasing, so some refineries have cut back,” she said.
Cedar Rapids’ average of $3.46 on Monday is 9 cents more than last week and 30 cents more than in mid-January. According to the AAA, regular unleaded in Iowa peaked at $4.02 a gallon July 16, 2008, but the highest price in Cedar Rapids was $3.97 last May 13.
U.S. production continues to boom, driven by new fields in North Dakota and drilling in the Gulf of Mexico. According to the U.S. Energy Information Administration domestic crude production is about 5.8 million barrels a day, up about 1 million from the same period last year.
There is no reason for these increases other than the speculators. We have plenty of gasoline and lots of production. It’s all about money for the big oil people. Look at the billions the oil company’s made in profit lats year. Then of course we have a president who turns down the pipelne project for no reason other than the left wingers hate oil and of course his buddy Buffet owns the train line that currently ship oil from Canada. Pure damn politics at our expense.
Really? How much gasoline do we have? Please enlighten us. We would also like your permission to run that pipeline right through your back yard. Deal?
Shop at HyVee East and get gasbusters! It’s easy to save up to .40/gallon.
Made up for in highest food prices in town!
agree with you patriot!!! Maybe our worthless president could step in and do something too!!! Or wait maybe he is in on making money from oil too???!!! Either way, we need someone to do something
Keep spending folks, those billonaire oilers need our help during this poor economy!
When gas goes up stop buying more then you need and shop for the better price. I see people buying 5 cent to 10 cent higher gas when they litterally could buy it cheaper right next door. Money drives this, if you buy from the cheaper place, the prices will go down. Remember gas wars? Worked then, will work again.
It’s time to stop the insanity. Higher fuel prices will push this country further into the hole then it already is.