Jump in oil price likely to boost cost of holiday gas

Gas prices have dropped every day for a month in Florida, but they are expected to shoot back up a bit after oil prices took a jump late last week.

Orlando area gas prices hit an average of $2.60 for regular unleaded Monday, according to AAA, the cheapest since the middle of April.

But gas prices tend to lag behind the oil markets for a few days, and prices have been dropping even after the cost for a barrel of crude oil shot up about 5 percent to settle at $68.58 last week. That sent gasoline futures up 5 percent in trading on the New York Mercantile Exchange, almost a sure sign that the increase will be passed along to drivers in the coming days.

It all happened after OPEC nations and Russia reached an agreement to raise oil production, although not as much as analysts anticipated. Tightened production from those countries is the reason gas prices in Orlando are 47 cents a gallon higher than they were a year ago.

“The decision may lead to an abrupt end in recent gas price declines, or may slow it down, just as gasoline prices had been catching up to the prior slump in crude oil,” GasBuddy senior petroleum analyst Patrick DeHaan said in a statement.

Orlando is still paying less than the Florida average of $2.70 a gallon or the national average of $2.85.

However, the recent spike in oil prices could push that national average higher with the approach of Independence Day, a major travel holiday.

“I'm optimistic that we can avoid a $3-per-gallon national average, but if gas prices were to mirror the gains in oil prices, a 5 percent gain would theoretically put us back at nearly $2.99 per gallon, not what you like to see any time, much less prior to the summer’s most popular holiday,” DeHaan said.