Jewishupdates's Blog

January 12, 2010

Gasoline Prices Zip Toward $3 Mark As Heating Bills Expected To Jump

Filed under: Uncategorized — jewishupdates @ 1:49 pm

Gasoline Prices Zip Toward $3 Mark As Heating Bills Expected To Jump

The national average retail price of regular gasoline rose 8.6 cents a gallon to a 15-month high of $2.751 a gallon in the week ended Monday, the Energy Information Administration said.

Retail gasoline prices are the highest since Oct 20, 2008.

Prices have been jumping on the back of a strong oil market where the cost for a barrel has spiked 20 percent in the past month on the New York Mercantile Exchange.

Skyrocketing gasoline prices couldn’t come at a worse time for motorists, who will see heating bills jump after the worst cold spell in years.

Oil prices are now about three times what they were a year ago.

Retail gasoline prices have gained 16 cents, or 6.3%, in the past three weeks and are 96.7 cents, or 54.2%, above a year earlier.

Nationwide, prices are 33%, or $1.363 a gallon, below the record $4.114 a gallon hit July 7, 2008.

Prices gained in all regions, led by a 9.2-cent gain on the East Coast. In California, the single-biggest gasoline market in the world’s biggest gasoline consumer, prices topped $3 a gallon for the first time since October 2009.

In December 2009, prices averaged $2.607 a gallon, up 54.5%, or 92 cents a gallon, from a year ago, but less than the $2.65-a-gallon level projected in EIA’s Short-Term Energy Outlook from Dec. 8. The EIA projected then that regular gasoline would retail at an average of $2.67 a gallon this month.

After crude prices dropped below $69 a barrel in mid-December, the EIA said on Dec. 23 that gasoline prices could hit $2.50 a gallon on a weekly average at some point this winter “without a significant shift in current market conditions.”

The EIA had projected U.S. benchmark crude oil would average $77 a barrel in December, up 87% from a year ago, but prices averaged around $74.60. Before the recent rally, the EIA projected a January average of $76 a barrel. But crude prices have averaged $82.40 a barrel so far in January and retail gasoline has averaged $2.780 a gallon.

The price of crude oil accounts for 69% of the cost of a gallon, the EIA said.

(Source: Wall Street Journal)


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