Tags: gasoline | oil | prices | pump

Experts: Gasoline Prices Are Poised to Only Keep Soaring

By Michael Kling   |   Friday, 19 Jul 2013 11:44 AM

Gasoline prices will probably keep rising this summer, experts say.

The national average for a gallon of regular unleaded reached $3.61 on Monday, up 14 cents from the previous week, according to AAA.

Higher retail gas prices are almost inevitable, reports CNNMoney. Despite their recent increases, prices at pump haven't kept pace with rising crude oil prices, meaning those prices will eventually be passed onto consumers.

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Tom Kloza, chief oil analyst for GasBuddy.com, sees at least a 50 percent chance gas prices will pass this year's record of $3.79 a gallon reached in February.

Kloza gave CNNMoney several reasons why gas prices may rise. Political turmoil, particularly in Egypt where the government was ousted, has made oil traders nervous, although U.S. oil supplies have not been impacted.

Prices of gold and other commodities are down following speculation that the Federal Reserve will wind down its stimulus. Investors may be selling gold and using that money to buy oil futures.

"Commodity investors have the largest bullish position [in oil] we've ever seen," Kloza said. "It's quite bubbly at the moment."

Oil consumption in the U.S. is up this summer, as Americans are driving more. So crude oil inventories have dropped 24 million barrels since the end of May, 24 percent more than they dropped last summer.

"There's been a real driving surge, whether because of pent-up demand or what, I'm not sure," Kloza said.

Shutdowns of refineries could send prices up. Hurricanes, or even threats of hurricanes, can close oil platforms and refineries along the Gulf Coast. And Industry insiders are saying the Irving Oil refinery in St. John, Brunswick, Canada, one of the ten largest in North America, could be shut down due to unscheduled maintenance needs.

"The 500-pound gorilla that's ready to walk in the door is the upcoming peak of hurricane season," in August, Patrick DeHaan, a GasBuddy.com senior petroleum analyst, told CNBC.

To save money, motorists can drive slower, combine trips, keep their vehicle well maintained, and opt for a gas-efficient vehicle.

But finding the cheapest gas station is key to cutting gasoline costs, DeHaan told CNBC.

"When prices are volatile, that can mean a wider gap between the cheapest and most expensive stations."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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