Gasoline prices up 54 cents a gallon since February low
Joe Zito, visiting from Florida, fills up his tank on Wednesday, May 6, 2015, at the Mobil station along the Long Island Expressway North Service Road and Patchogue-Holbrook Road in Holbrook, where the cash price for regular gasoline was $2.89. Credit: Newsday / John Paraskevas
Gasoline has risen by 54 cents a gallon on Long Island since early February, in what experts attribute to seasonal factors, rising crude oil prices and U.S. job growth.
Most experts expect further increases in coming weeks.
Regular grade averaged $2.89 a gallon Wednesday in Nassau and Suffolk counties, up from the winter's low of $2.348 on Feb. 2, according to the motorist group AAA.
Still, the new price is $1.08 a gallon below a year earlier. The average peaked last year on July 2 at $4.036 a gallon.
Demand for gasoline usually rises in the spring, with improving weather and more discretionary driving. Prices also increase because of the annual switch-over in the spring to more expensive-to-produce spring- and summer-grade gasolines.
Experts think pump prices will rise more before peaking in summer, but estimates of the further increase vary widely.
"It's very possible we'll see $3 a gallon this summer as a national average," said Carl Larry, based in Houston as director of oil and gas for the global consultants Frost & Sullivan. That would represent an increase of 36 cents a gallon over Wednesday's national average of $2.638.
This chart shows how drastically gas prices have fluctuated in the past year.
He says an improving jobs picture suggests higher demand for automotive fuel. "From last May to this May, we have two million more people working," said Larry. "Whether they're full-time or part-time, they are still driving to get to and from work."
But Andy Lipow, president of Houston consulting company Lipow Oil Associates LLC, sees no more than a hike of 5 cents to 10 cents a gallon until the summer's peak, unless crude prices soar. "Gasoline inventories are more than adequate to meet the upcoming driving season," he said.
The benchmark grade of U.S. crude oil, which collapsed last year from a high of $107.95 a barrel on June 20 to as low as $43.39, on March 17, settled Wednesday at $60.93 on the New York Mercantile Exchange.
The price of crude has been supported in recent months by a slowdown in drilling activity in U.S. shale oil regions, portending a decline in production, and also by growth in demand worldwide and by international events including Saudi Arabian aerial attacks on Shia rebels in Yemen, where a civil war is raging in a country located among major oil fields. Also contributing recently has been a weakening of the dollar against the euro, diverting more investor dollars to commodities like oil that are priced in dollars.
