Cost of crude oil spikes

By Johnny Jackson


Energy officials are reporting sharp increases in crude-oil prices, which have resulted in unexpected hikes in gas prices across the United States.

The price of crude oil has risen over the past two weeks by more than $8 per barrel, with a near $7-per-barrel increase over last week, according to officials.

Crude-oil prices closed out last week at $78.53 per barrel on the New York Mercantile Exchange.

According to the U.S. Department of Energy, fuel demand increased by 1.1 percent and U.S. refineries are meeting current demand even while operating at an 80.9-percent output rate.

"The numbers tell us that consumer demand is not driving fuel prices higher," said Gregg Laskoski, spokesman for AAA Auto Club South. "It's the weak U.S. dollar that is rallying commodities like crude oil and pushing gasoline prices now."

Laskoski said large crude-oil inventories - 9.6 percent higher than the five-year average for this time of year - are also indicators of a slow-paced economic recovery.

AAA Auto Club South reported Monday the average price for regular unleaded gas had risen to $2.56 per gallon, up 8 cents in the past week. Georgia's average price increased to $2.41 per gallon, up 13 cents in the past week.

Likewise, metro-Atlanta gas prices were reported at $2.40 per gallon for regular unleaded, 15 cents higher than a week ago.

Crude-oil prices are now more than $12 per barrel more than they were in late September, said Neil Gamson, an economist with the U.S. Energy Information Administration.

"Our short-term forecasts did not assume prices would be this high," Gamson said. "Some of it was caused by colder weather, because there's plenty of gasoline in storage."

He added that the economy has helped drive crude-oil prices above $70 per barrel, as opposed to the $66 per barrel forecasters anticipated.

"If these crude-oil prices don't go down, we could see further increases," Gamson added. "I think we're going to see several more increases in the price of gasoline, as there is sort of a lag between crude-oil prices and gasoline prices by a week or more. [Gas] prices could go up several more cents per gallon. Then, we think that it should settle down."