Fuel prices rose 30 cents a gallon, on average, this past month. A holiday bump or a speculator binge?
“Ouch,” said Kim Paterno, a suburban Detroit saleswoman, as she pulled up to the pump at Sunny’s Sunoco, in Pleasant Ridge, Michigan. “It seemed like fuel prices had settled in under two bucks for such a long-time,” she said, almost wistfully,” but every time I stop here, or just drive by, the numbers are up another nickel or dime.
As recently as late April, most motorists in the Motor City could find regular fuel for less than $2.00. As locals prepare for the Memorial Day holiday, $2.40, even $2.50 is the figure at most pumps. And the situation isn’t limited to Michigan.
Oil prices soared to a six-month high, on Wednesday, though by late Thursday afternoon they’d slipped back by about a dollar, depending on grade and source, to around $60 a barrel. That compares with prices in the $34 range, earlier this year, and the $147-a-barrel peak, set in July 2008.
Current gasoline prices, according to the AAA, are up about 30 cents, over the last month, to around $2.36. That can vary widely, with some markets, like San Francisco, Los Angeles and Honolulu, starting to see numbers nudging $3.00. Over the 2008 Memorial Day holiday, the national average had already jumped to $3.80, with regular unleaded soon to punching past the psychology devastating $4.00 mark that many analysts believe helped shove the U.S. firmly into recession.
Why prices are soaring now depends on who you ask. It’s traditional for both refiners and retailers to try to maximize profits over a long holiday weekend. And there it doesn’t help that Americans are back on the road again. Motorists had taken the unprecedented step of trimming back their driving, over the last year, AAA is forecasting a 1.5% increase in the number of people traveling this holiday – to 32.4 million, or 10% of the population. (more…)