Scary! Retail Gas Prices Hit Highest Level This Year
Retail gasoline prices continued higher Friday to a new peak for the year, forcing consumers to dig deeper into their stretched budgets to pay for fuel.
Natural Gas and Gasoline Higher
Natural gas prices have also been moving up, and have now climbed 16 percent in the past two months — just in time for the winter home heating season to kick in.
Supplies of oil and gas are plentiful, so that’s not why the prices are climbing. Storage points for natural gas are so packed that producers are running out of places to put it. Crude Oil stocks are also well above average levels.
Gasoline prices are now up 17 straight days according to AAA. That is the highest national price average since Oct. 26, 2008. Prices are averaging 5.9 cents higher from a week ago and 14.8 cents from a year ago. The average retail price for gas was $1.686 a gallon last December. Today's price adds about $50 a month on to the monthly gas cost for the gasoline customer compared with then.
Iffy Economic news
This comes at a time when unemployment is at a 26-year high, and consumer confidence is low. The stock market reacted badly to the consumer confidence numbers released on Friday, driving the Dow down almost 250 points on Friday.
Oil prices skyrocketed in July 2008, to $147 a barrel. That helped to put the economy into recession. Economists are worried that high oil prices will put a halt to the budding economic recovery.
Crude Oil and Dollar Trade
The current reason for the increase in pump prices is because crude oil prices have been rising, from $65 a barrel as recently as August to $82 last week. Oil settled Friday afternoon at $77 a barrel.
A year ago, gasoline prices were heading down as the recession kicked in and the implications of the global financial crisis became better understood. Demand for oil and gasoline went down with the economic contraction.
Crude Oil is moving generally higher because there are signs that the economy is improving. The weaker dollar US Dollar is also a large contributing factor, since crude oil’s worldwide price is determined in US Dollars, a less valuable currency leads to higher prices for oil. The US Commerce Dept. said that the U.S. economy grew at a 3.5 percent annual pace in the third quarter on Thursday, the best growth percentage in two years, breaking four consecutive quarters of declines.
Inventory levels of gasoline, heating oil and diesel fuel remain well above normal levels.
As the dollar rose on Friday, crude oil fell sharply. There was also the dour consumer spending report, and doubts about consumer confidence going into the holiday season.
There’s some scary Halloween news!
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