Retail gas prices head higher: Fluctuations caused by dollar strength, refineries, demand

Motorists are well down the road to higher pump prices as warmer weather and the driving season approach.

Average retail gasoline prices, continuing a surge that started last month, have now matched their 2010 high on the way to prices that many analysts believe will top $3 per gallon this spring.

The nationwide average retail gasoline price rose 0.6 cents Monday to $2.753 per gallon, virtually identical to the high water mark of $2.7583 reached Jan. 14, according to AAA, Wright Express and Oil Price Information Service.

Prices have risen 9.2 cents in the last month and are now 80.6 cents higher than levels of a year ago.

In Bradenton-Sarasota, motorists are paying an average of $2.81 per gallon, about 4 1/2 cents higher than last week, according to Bill Diamond, senior motor club manager for AAA in Bradenton.

“It started going up the last two to three weeks,” said Diamond, who said the price increase is “unusual” for this time of year, still three months before summer. A year ago, the price for a gallon was $1.99 cents locally.

“When the Euro increases, the dollar declines and the price of oil usually goes up,” Diamond said. The fact that oil refineries will soon go offline to change their fuel production systems also will mean higher prices.

“It is amazing how sensitive it (oil price reaction) is,” Diamond said.

But gas prices usually do go up as the summer approaches. There is more demand for gas as people take to the roads for vacations.

The Energy Information Administration is among those predicting $3 gallon gas this spring.

The jump in retail prices follows an increase in wholesale gasoline prices. April contracts on the New York Mercantile Exchange rose 1.43 cents to $2.2853 per gallon.

Friday’s settlement price of $2.271 per gallon was the highest settlement price for gasoline since Oct. 1, 2008, according to Peter Beutel of Cameron Hanover.

An 18 percent rise in oil prices over the past month that pushed crude near a 2010 high of $83.95 per barrel is also boosting gas prices.

Part of the increase in gasoline prices is seasonal. Prices typically go up in the spring as refiners switch to more expensive blends of gasoline. Demand usually picks up as motorists emerge from hibernation and hit the road.

But things may be different this year. The U.S. remains well supplied with gasoline and oil, so there is no prospect of a supply shortage driving up prices. Also, the high unemployment rate and uncertainty about the economic recovery have kept demand for gasoline about where it was a year ago.

Benchmark crude for April delivery rose 26 cents to $81.76 a barrel on the Nymex. Earlier in the session, it peaked at $82.41.

In other trading in April contracts, heating oil rose 0.52 cent to $2.1026 a gallon.

Natural gas fell 8.2 cents to $4.510 per 1,000 cubic feet.

In London, Brent crude gained 40 cents at $80.29 on the ICE futures exchange.

— Herald staff contributed to this report