PAIN AT THE PUMP
Party’s over for cheap gasoline as prices continue to rise
Motorists have enjoyed nearly four years of cheap gasoline, but the party at the pump is done and many consumers are feeling hung over.
The state’s average price for regular unleaded gasoline reached $2.80 a gallon on Friday. That’s up 45 cents from a year ago, and it’s the highest price since oil markets crashed in fall 2014, dragging gasoline to below $2 per gallon in recent years.
Motorists filling up at Murphy Express at 2707 Carlisle NE on Tuesday morning paid $2.69 a gallon for regular unleaded, and $3.19 for super unleaded. That’s a bit cheaper than other stations around town, but patrons said it still stings.
“For a single college kid living on a fixed income, it sucks,” said Josh McArthur. “I’m 21, and I like to go have fun. But I’m being more careful now because I have to drop about $30 a week into my car.”
Richard Sprague, 26, said the price is “ridiculously high. It’s making my pocket a lot thinner.”
Another motorist, Stephanie Carjill, chose to just top off her tank since she uses super unleaded.
“I don’t like this,” Carjill said. “Prices just keep climbing. But you need gasoline to run your car, so you have to buy it if you want to get anywhere.”
Predicting prices is notoriously difficult, but some market analysts say the jump at the pump may ease as the peak summer driving season gets underway. Prices usually climb in spring when refiners switch from less-expensive winter fuel to more environmentally friendly summer blends that are required under federal regulations.
Tom Kloza, chief analyst with the Maryland-based Oil Price Information Service, said gasoline will likely hover between $2.80 and $3 per gallon for regular unleaded this summer.
“The typical family will have to spend about $200 more than during last year’s driving season, and about $250 more than in 2016,” Kloza said. “It’s the most expensive season since 2014.”
Still, it’s cheaper than before oil prices crashed four years ago, when gasoline cost $3.50 a gallon on average.
The oil bust, driven by global oversupply and sluggish economic growth, cut crude prices from above $100 a barrel to below $30 by 2016, dragging gasoline prices down with it. But since then, cheap fuel and a more robust world economy have spurred a surge in demand. In addition, the Organization of Petroleum Exporting Countries has cut output by two million barrels a day since late 2016, significantly lowering global inventories and driving crude prices back above $60 a barrel. That, in turn, has pushed gasoline prices up.
Political tensions in the Middle East could still push crude prices higher. Indeed, with President Donald Trump’s decision to end the Iran nuclear deal, oil hit $70 a barrel this week.
But with production in the U.S., Canada and Brazil now surging, crude inventories could soon grow again, possibly causing another crash in prices and a new round of pump relief by next year, Kloza said.