Gas is nearing $2 per gallon -- again.
After the horribly high prices to fill up our Hyundai last summer, I didn't think gas would ever decrease in price again. (Yes, we drive a Hyundai. Thankfully, I had left my SUV back in California.) After all, if people (albeit a smaller amount) were willing to shell out over $4 per gallon, why would gas prices ever drop again? Well, then the whole demand issue came in to play, prices came down, we wiped the stress-induced sweat from our brow and happily drove our Hyundai at half the price.
But gas prices have reversed their downward-to-flat course and are now creeping back up toward $2. It always seems like when you least expect it, you're shelling out $40+ dollars at the pump and lamenting about the "good old days" when gas was only $1.50. Now is an even worse time for these lamentations, what with more people laid off than in recent history and struggling to save what little they can from unemployment.
So will the prices continue to climb? This time of year is generally when oil refineries perform maintenance on their plants, so we should take that into account, as they need to cover their costs, but as gas prices are rising, the price of a barrel of crude oil is sinking -- to the recent tune of about $35/barrel. Why the disparity?
"I think what you're seeing now is a backlash of a period, from the end of the summer until the end of the year, when refiners were selling gas into the consumer market at a discount to crude oil," Ben Brockwell, director of data pricing for OPUS, told CNNMoney.
Brockwell said refineries lost money last year, despite the surge in gas prices. The refineries in the latter half of 2008 were paying top dollar for oil, and then producing gasoline in a low-demand economy, he said. Now, refineries are producing less, driving up prices in even this low-demand economy, while stockpiling discount oil, he said.
The good news is that gas prices probably won't rise to the heights they saw last summer, the bad news is those extra few dollars to funnel into your tank will need to be accounted for in your budget. Here's to cleaner energy.
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