The price of crude oil climbed higher into record territory Wednesday, topping $72 a barrel. The high cost of crude oil, along with seasonal refinery outages, is driving up prices at the gas pump.
The Energy Department’s weekly report on petroleum carried a headline Wednesday, asking "$3 per gallon?" That question has already been answered in Los Angeles and some other parts of the country, where gasoline prices hit the $3 mark this week.
"The bad news is the numbers are going to keep going up. We expect that gasoline over the next few weeks could go, on average, to $3.10, $3.20 a gallon," says spokeswoman Carol Thorpe of the American Automobile Association.
These high prices are coming weeks before the busy, summer-driving season. But it’s no longer predictable that gas prices will peak at the same time the thermometer does.
"It used to be sure that every holiday, the gas prices would go up. Every summer the gas prices would go up," Thorpe says. "But what we’ve seen is gas prices go up at odd times: down on holidays, maybe down in the summer, then up over Labor Day. So it really is dependent on what’s happening in the oil markets, what’s happening in the world, what’s happening to supply."
What’s happening in the world right now has pushed oil prices to an all-time high. That’s partly a result of tensions with the big oil-producing countries of Iran and Nigeria.
"This market seems to be on a track to continue to move higher, and there doesn’t seem to be anything in the near term that’s going to stop this momentum," says analyst Phil Flynn of Alaron Trading in Chicago.
With the stock market rallying this week, there’s no sign of the kind of economic slowdown that might cut into demand for oil. And drivers are still using more gasoline than they did a year ago, even though it now costs them more than 50 cents a gallon more.
The Energy Department says it’s not a foregone conclusion that the average price of gasoline nationwide will hit the $3 mark this year. The Department expects many refineries that are now shut down for maintenance will soon begin pumping gas again. That should boost supplies and perhaps lower prices just in time for Memorial Day. The Energy Department expects gas prices to remain about 25 cents a gallon higher than they were last year, though. And that’s assuming there are no major disruptions in oil or gas supplies.