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What's driving increase in gas prices?
Drivers have likely noticed an increase in gas prices in recent weeks, adding several dollars to the cost of a fill-up. FOX 26 Business Reporter Tom Zizka has a look at some of the factors causing the price hike.
HOUSTON - Drivers have likely noticed gas prices have risen dramatically, in recent weeks, adding several dollars to the cost of a fill-up. The national average for regular unleaded is $3.53 a gallon. In Houston, it's $3.11, which is a dime more than a year ago, and $0.25 more, just in the last month.
For most people stopping for a fill-up, the rising prices have not gone unnoticed. "They're definitely going up super fast," notes Phillip Edwards.
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Houston energy analyst Andy Lipow expects the hikes to continue, as a response to global demand, more expensive warm-weather fuel blends, and stable, but expensive, oil that's priced at about $80 a barrel. "Gasoline prices are going continue to increase, through the summer, to about $3.75 as the national average," says Lipow.
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On top of that, the nation's aging refining capacity has been trimmed in recent years, leaving fewer facilities carrying a heavier load. "All of the refining system wants to run full-out, at 100%," says Lipow, "Every time we experience an unscheduled refinery outage, gasoline prices spike upward, and we see that reflected in higher prices at the pump."
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But even with the United States pumping more oil than any other nation, some believe 'more' may be necessary; particularly heavier crude from different parts of the country that can help shoulder petroleum demand, beyond the nation's driving needs. "When we don't have that supply that's necessary, and our demand is strong, you're going to continue to see prices go up," says Dallas oil & gas expert Jay Young.
In the short term, Lipow expects prices to rise another ten cents in the next week to 10 days, on the way to significantly higher prices later in the summer. The better news is that local prices are a relative bargain, compared to more expensive markets, like California, where gas is already approaching $5 a gallon.