LI gas prices spike above $4, again
Drivers pump gas at Shamrock gas station in Baldwin. Prices in mid-July have spiked above $4 a gallon, much as they were in mid-June. Credit: Newsday, 2011 / Alejandra Villa
Gasoline popped back up over $4 on Long Island during the weekend for the first time since mid-June in what experts say was delayed reaction to an increase in crude oil prices and what at least some say are tight gasoline supplies.
Regular gasoline averaged $4.013 a gallon in Nassau and Suffolk, the AAA said, up 5.6 cents from a week earlier. Prices had been declining since peaking at $4.284 May 12 and had fallen to a low of $3.91 in early July. Motorists are paying about a dollar a gallon more than a year ago.
Stephen Schork, who publishes the energy newsletter The Schork Report out of Pennsylvania, thinks tight supplies of gasoline are major factors in the price increase and predicts pump prices 20 cents higher by Labor Day.
"We are at the peak of the [summer driving] season and demand has been stronger than anticipated," he said. Other analysts have cited recent refinery outages in Missouri, Ohio and Texas for what they deem tight supplies of gasoline.
Analysts also have blamed the continued absence from the market of high-quality Libyan crude oil because of fighting there. Oil futures fell Monday, however, with the U.S. benchmark grade losing $1.31 to settle at $95.93 on worries about government debt in the United States and Europe.
Dominick Chirichella, a senior partner at the Energy Management Institute in New York, which trades and also educates and publishes on energy topics, contends the rise in crude oil and gas prices is not the result of supply constraints. "I think the market is well supplied," he said. "There is no shortage of anything, especially gasoline." He calls oil and gasoline futures prices "craziness" and says, "We're in an emotional market."
Futures prices rose last week when Federal Reserve Board chairman Ben Bernanke said the central bank might try a third round of stimulative measures to increase the amount of money in circulation.
Such measures have the side effect of decreasing the value of the dollar against foreign currencies. That in turn, makes oil, priced in dollars, a relative bargain for investors with foreign currencies.
This story was supplemented with reports from Bloomberg News.
Out East with Doug Geed: Wine harvests, a fish market, baked treats and poinsettias NewsdayTV's Doug Geed visits two wineries and a fish market, and then it's time for holiday cheer, with a visit to a bakery and poinsettia greenhouses.
Out East with Doug Geed: Wine harvests, a fish market, baked treats and poinsettias NewsdayTV's Doug Geed visits two wineries and a fish market, and then it's time for holiday cheer, with a visit to a bakery and poinsettia greenhouses.
