Gasoline prices are on an upward spiral nationally –– and in the Southeast –– as the average price for a gallon of unleaded regular in Georgia jumped by 14 cents over the last week.
The state’s average price is now $3.34 a gallon, according to Jessica Brady, a spokesperson for AAA’s The Auto Club Group.
Floridians are currently paying an average of $3.44 a gallon, a 13-cent increase from the week prior, she said. Tennessee’s average price is $3.24 a gallon, which is 12 cents more than that state’s motorists were paying lest week.
Nationally, motorists are seeing similar increases, as the average price around the country is now $3.37 a gallon, Brady said, a dime more than the week before.
“Motorists will probably see pump prices inch up again this week, which is likely to reveal whether or not oil prices are sustainable above $100 a barrel,” said Brady.
She said current, retail gasoline prices have motorists worried about them reaching $4 a gallon again, as they did for awhile in 2011. The big question, Brady said, is whether the national average will bump up to $4.20 a gallon by this spring or summer.
However, she said it is too early to determine what the average prices will be during those seasons. Figuring out which way prices will go in the short term, much less the long term, is difficult.
Crude oil prices continue to remain elevated, as Iran’s ongoing threats to impede traffic in the Strait of Hormuz, rattle oil exporters, and others in the industry. Those concerns are causing gasoline prices to rise, Brady said. Positive U.S. employment numbers, she explained, are another factor leading to higher gas prices. Crude oil settled at $101.56 a barrel on Jan. 6, on the New York Mercantile Exchange. That is $2.73 higher than the week prior.
Due to some bearish news also in the market, Brady said, there is a chance that oil and gas prices could be forced to lower levels in the coming weeks. Theories that Europe will begin a recession, which could restrain global demand, is burdening the market, and has lowered the value of the euro against the dollar. This, she said, will remove the allure of oil as an investment commodity.
Furthermore, U.S. gasoline demand is on a downward slope, with inventories increasing by 2.5 million barrels, to 220.2 million barrels during the last week of December, she said.
“Gas prices generally inch up after the first of the year on optimism [that] the economy will continue to improve and set the stage for increased demand in the new year,” said Brady. “The recent increase in U.S. payrolls, by 200,000 in December, supports this notion ... Couple it with concerns [about] Iran ... and pump prices are sure to rise.”