Gas prices surge 9%

[scandal 951]

Prices are now around $2.40/gallon where I live. They were below $2 only a month ago.

http://money.cnn.com/2009/05/11/news/economy/gas_prices/

Gas prices surge 9%: Don't fear $4

Prices at the pump are up 18 cents over the last 13 days but analysts say $4 a gallon is not in the cards.

By Ben Rooney, CNNMoney.com staff writer

Last Updated: May 11, 2009: 2:55 PM ET

NEW YORK (CNNMoney.com) -- Gas prices have surged nearly 9% over the past two weeks, but analysts say a return to last summer's record highs of $4 a gallon is not on the horizon.

Gasoline prices have jumped about 18 cents during the past 13 days, with the national average hitting $2.226 a gallon on Monday, according to a survey by motorist group AAA.

While prices have been on a tear, they are still some 46% lower from the all-time high of $4.114 a gallon hit last July.

It's not surprising that prices have been moving higher as they typically increase ahead of the Memorial Day holiday -- the unofficial beginning of the peak summer driving season

"A bump-up is to be expected this time of year but we're not on the way to another spike," said AAA spokesman Troy Green. He said would be "surprised" to see prices reach $3.50 a gallon, barring unforeseen supply disruptions such as a hurricane, and he would be "shocked" to see $3.75 a gallon this summer.

The oil factor. Many analysts expect gas prices to continue climbing over the next few weeks, largely because of rising crude oil prices, the main ingredient in gasoline.

"Gas prices have trended higher in lockstep with crude prices," said Chris Lafakis, economist at Moody's Economy.com. "Crude is the biggest input in the price of gasoline."

Oil prices have rallied some 73% over the past three months as signs the economy is headed for a recovery have raised bets that demand for oil and gas will rebound sooner rather than later. Oil prices edged lower Monday after closing at their highest level of the year Friday.

Despite the recent increase in oil prices, the fundamental backdrop for crude market does not support higher prices, analysts said. And that may help keep gasoline prices in line.

"There's some irrational optimism about the future," said Tom Kloza, chief oil analyst for the Oil Price Information Service. "People are looking at the bright side and not the actual data points for supply and demand."

Demand for oil is at its weakest level since 1995 and the nation's supplies of crude are at their highest since 1990, according to the Department of Energy.

Ebb and flow of driver demand. While there are some indications that demand for gas is firming up and that drivers are gradually increasing the number of miles they drive each month, the lousy economy is expected to keep a lid on gas prices.

For drivers, income is the number one issue when it comes to how far and how often they drive, Lafakis said. With unemployment at 8.9% and rising, consumers are likely to remain frugal, keeping downward pressure on gas prices.

"In an environment where income growth is very weak or has declined, you're not going to get the kind of demand that is necessary to push gas prices to $2.50 or $3.00 a gallon," he said. "That won't happen this summer because the macro economic environment is putting a ceiling on gas prices."

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[The_Dude 1,142]

The oil companies got an invaluable lesson on price elasticity last summer. Let's see how far they push prices this year.

[Mary Lou 681]

Last week the prices here went from $2.19 a gal to $2.49 a gal overnight.

[w¡n9Nµ7 §£@¥€r 123]

Last week the prices here went from $2.19 a gal to $2.49 a gal overnight.

Hopefully this will mean a return to higher inflation.

Edited May 11, 2009 by Randomizer

[Nagishkaw 510]

$2.25 a gallon here. Two weeks ago it was $1.99 .

[SMOKE 1,426]

its obama's fault!!!.....shut up! last summer it was Bush's fault, so its obama's fault now.

[w¡n9Nµ7 §£@¥€r 123]

its obama's fault!!!.....shut up! last summer it was Bush's fault, so its obama's fault now.

Yeah he is making his muslimist terrorist sheikh buddies in the ME rich!

[c_and_a 0]

I love living in a city and not owning a car. Have fun paying for gas, suckers!

[one...two...tree 2,762]

its obama's fault!!!.....shut up! last summer it was Bush's fault, so its obama's fault now.

Yeah he is making his muslimist terrorist sheikh buddies in the ME rich!

...it all started with that bow.

[The_Dude 1,142]

I love living in a city and not owning a car. Have fun paying for gas, suckers!

Ha ha, jokes on you....... you have to endure crazy crack wh0res and smelly bums on the bus

[c_and_a 0]

I love living in a city and not owning a car. Have fun paying for gas, suckers!

Ha ha, jokes on you....... you have to endure crazy crack wh0res and smelly bums on the bus

You've obviously never been on the D.C. Metro, it is probably the best subway system in the country, besides maybe the one in San Fran.

Again, enjoy the gas prices.

[The_Dude 1,142]

I love living in a city and not owning a car. Have fun paying for gas, suckers!

Ha ha, jokes on you....... you have to endure crazy crack wh0res and smelly bums on the bus

You've obviously never been on the D.C. Metro, it is probably the best subway system in the country, besides maybe the one in San Fran.

Again, enjoy the gas prices.

I actually have been on both. The fact remains..... while you sit next to some annoying and smelly person on the bus/train, I am sitting in plush leather seats. Enjoy the smell.

[pedroh 21]

my 'rice toaster' gives me a week for 10 bucks.. so.. no biggie here

[GaryC 7]

I use 15 gal every two weeks. Not a biggie for me either.