Oil Above $80 While Price of Gasoline Remains Flat

The trading price of a barrel of oil climbed above $80 for the first time since early January based on the believe that the United States Federal Reserve will be forced to keep its key federal funds rate at record lows for an extended period of time.

The Federal Reserve will likely have to keep interest rates low in an attempt to help keep credit expenses down for consumers while helping to allow businesses to cheaply borrow money to begin bringing down the unemployment rate.

A low federal funds rate often aids in economic expansion, which in turn, puts upward pressure on the price of commodities, especially things like oil and gold, due to the increased expectation of inflation and devaluing of the dollar.  In international trading, the price of oil is valued in dollars.

Despite the nearly 15% increase in the price of oil over the past two weeks, the price of gasoline has remained relatively flat, jumping less than one percent (two cents) over the same time frame.

However, with climbing oil prices and the busy summer driving season not that far away it seems a near certainty that the price of gasoline will climb significantly higher in the weeks to come.  In fact, it’s not a stretch to assume that this summer most of us will be paying $3 or more per gallon.

Currently, only Alaska ($3.25) and Hawaii ($3.37) are reporting state-wide average prices above $3 per gallon.  Wyoming has the lowest state-wide average price of gasoline at $2.37 per gallon.

What are your thoughts on where the price of gasoline is headed?  Leave your comments below.

Comments

  1. Dudley Holden says

    Propane or Nat Gas might be a way to go ?

  2. I say we need to restore the Glass Seagull Act.
    The people driving up energy prices should by tried for treason.
    All inventories are at record high.
    Crude at 334.5 million barrels.
    Unleaded gas inventories up 6 out of the last 7 weeks with inventories increasing by 16.3 million barrels.
    CNBC should be shut down for feeding the speculation in Energy.
    Job coming back never when Energy is bleeding every family for every extra penny they have.
    The media need to expose these Terrorist for what they are.
    Thursday Feb 18 Government Report.
    Summary of Weekly Petroleum Data for the Week Ending February 12, 2010

    U.S. crude oil refinery inputs averaged 13.8 million barrels per day during
    the
    week ending February 12, 182 thousand barrels per day above the previous
    week’s
    average. Refineries operated at 79.8 percent of their operable capacity last
    week. Gasoline production decreased last week, averaging 8.4 million barrels
    per day. Distillate fuel production increased last week, averaging 3.4
    million
    barrels per day.
    U.S. commercial crude oil inventories (excluding those in the Strategic
    Petroleum Reserve) increased by 3.1 million barrels from the previous week.
    At
    334.5 million barrels, U.S. crude oil inventories are above the upper limit
    of
    the average range for this time of year. Total motor gasoline inventories
    increased by 1.7 million barrels last week, and are above the upper limit of
    the average range. Finished gasoline inventories decreased while blending
    components inventories increased last week. Distillate fuel inventories
    decreased by 2.9 million barrels, and are above the upper boundary of the
    average range for this time of year.
    Over the last four weeks, motor gasoline demand has averaged 8.6 million
    barrels per day, down by 1.3 percent from the same period last year.
    Distillate
    fuel demand has averaged 3.7 million barrels per day over the last four
    weeks,
    down by 7.4 percent from the same period last year. Jet fuel demand is 1.4
    percent higher over the last four weeks compared to the same four-week
    period
    last year.
    Look at the Demand from the Government report. Last March oil was $32 a barrel.
    As a concerned Consumer, American need our media to expose these crooks.

  3. Yes, Natural gas is the way to go! Go read up on T. Boone Pickens, boone@pickensplan.com,
    and see what he’s got going. Very interesting!

  4. I’ve just made a quick calculation to see how much we are paying for fuel in Svn and the price that comes out is 5,93 per gallon. I know it is not important to you but I think that might be something to expect in next years if your guvernment fallows the ”green” directions.

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