Gas Prices Quietly Starting to Creep Up
December 23rd, 2006 | by Brian Carr |Looks like the annual rise in gas prices has come a little bit early this year.
Over the past two months gas prices have risen nearly 10% thanks in large part to rising oil prices brought about by OPEC daily oil production cuts. Since hitting $2.15 per gallon (the low for 2006) in mid-November, gas prices have quietly crept upwards and now the national average price for a gallon of regular unleaded gas now sits at 2.35. This represents an increase of roughly 9.3%.
If you look at a historical gas price chart, the price of gasoline typically begins to rise around the first of the year. Usually this coincides with an increase in the price of oil thanks to the fact that the Northern Hemisphere’s winter is typically in full gear, meaning an increase in demand for heating oils and natural gas. It also seems that the price of gas will steadily increase into the summer months before gradually dropping after Labor Day.
Unfortunately, it seems this year’s hike came a little bit early and despite a relatively mild winter. While there are several reasons behind this, it appears the biggest catalyst is OPEC’s decision to cut oil production by 1.7 million barrels per day (1.2 million now, an additional 500,000 starting in February).
If this keeps up, it looks like the record high prices we experienced last summer could be right around the corner. Hope you enjoyed the “low” prices while they lasted.
