Filling up becoming a more expensive proposition

By Palm Beach Business.com

DELRAY BEACH — Three-dollar-a-gallon regular gasoline will be here soon — if it’s not here already.

Gasoline futures surged about 3.5 cents Monday to $2.43 a gallon; the last time they were that high George W. Bush was occupying the White House and there was substantial doubt about who would succeed him. The date: Sept. 30, 2008.

And you can thank higher fuel consumptions and the growing economy, which is encouraging speculators to push up energy prices.

"The positive economic news is music to investors' ears," said Jessica Brady, manager, AAA Public Relations. "Such optimistic news is viewed as solid evidence that the economy is on the rise, thus boosting investor confidence that fuel demand is increasing.”

The Energy Information Administration reported last week that fuel consumption in the US over the past four weeks rose 3.1 percent year-over-year, by 9.2 million barrels a day.  At the same time, the Commerce Department reported that  U.S. economy grew at a 3.2 percent rate in the first quarter of 2010. 

At the same time a weakened dollar helped to push the price of crude even higher by increasing its appeal.

"Retail gasoline prices should gain a few cents this week in response to the higher price of crude oil,” Brady said.

Not contributing the run-in prices: the BP Oil spill in the Gulf of Mexico, Brady said.
The EIA on Monday reported that regular gasoline at the pump is averaging $2.89 a gallon nationally, up nearly a nickel over the past week.

In Florida, regular is averaging slightly less — $2.874 a gallon, up nearly 4 cents over the week.

Locally, the increase is about two cents a gallon — but prices here already are well above the state and national average.

As of Monday, In Palm Beach County, regular is averaging $2.976 a gallon, up from $2.957 a week ago, according to AAA’s Fuel Gauge Report. In Broward, the average is $2.921, up from $2.901 a week ago.

EIA in its latest short-term outlook on retail prices, issued about a month ago, predicted regular will average $2.92 through the summer driving season, with prices exceeding $3.
By the way, the current national average of $2.898 is 82 cents higher than the year-ago price.

Chart above is from the EIA.