0

Officials: Gas prices continue incremental climb

Photo by Heather Middleton

Photo by Heather Middleton

By Johnny Jackson

jjackson@henryherald.com

Energy officials stress that with refineries back online and global crude oil consumption surging, consumers should expect a modest, incremental climb in gas prices this summer.

Metro Atlanta is seeing the climb already near the national average, according to AAA's Daily Fuel Gauge Report.

Wednesday's average price for a gallon of gas in metro Atlanta was just a penny shy of the national average, the report said. Consumers paid $3.64 per gallon of regular-grade gas nationwide, compared to $3.63 in metro Atlanta.

Some area residents may have noticed 30-cent hikes at their neighborhood gas stations since the Fourth of July, but the average increase has been more modest overall in metro Atlanta. AAA reported the average price increase at the pump has been roughly 15-cents per gallon over the week since the summer holiday.

Consumers using GasBuddy.com -- a Brooklyn Park, Minnesota-based consumer watch company -- have reported gas prices in metro Atlanta, ranging from $3.41 per gallon of regular-grade at discount retailers up to $3.85 per gallon at chain gas stations.

Energy officials said gas prices have followed the sudden upturn in crude oil prices, and may continue to increase incrementally over the course of the summer unobscured.

Regular-grade gas in the U.S. is expected to average $3.62 per gallon in the third quarter of 2011, according to the U.S. Energy Information Administration (EIA) Short-Term Energy Outlook. Prices are projected to average $3.51 per gallon in the last quarter of the year.

"Any forecast is extremely uncertain," said EIA Senior Economist Tancred Lidderdale, noting the increased volatilility of the commodities market. "The last decade has certainly provided some twists."

Lidderdale noted the decline in gas prices late this past spring correlated to dips in the price of crude oil some days earlier.

World crude oil prices initially fell following the June 23 announcement by the International Energy Agency that its member countries would release up to 60 million barrels from strategic reserves but then rose above the pre-announcement levels in late June and early July. Consumers saw the increase mirrored at the pump following last week's Fourth of July holiday.

Attributing observed price changes since June 23 to the International Energy Agency's announcement is difficult, according to EIA officials, who note other contributing factors like uncertainty over oil supply disruptions and crude oil consumption growth.

Lidderdale said total U.S. consumption of liquid fuels grew in 2010 by 2 percent (or 380,000 barrels a day). In contrast, this year's total U.S. consumption has declined with a growth rate of 0.2 percent, while consumption in other countries around the globe continues to grow.

The economist said the world has lost 1.5 million barrels a day in crude oil exports from Libya since unrest struck the North African nation in late February. He explained the loss of nearly 2 percent of the world's daily crude oil supply, coupled with continued growth in global consumption, contributes to increased crude oil prices and eventually translates into higher costs at the pump.