Weekly Gas Prices Show Ninth Consecutive Increase
April 4, 2011 — -- The average price of gasoline hit $3.68 per gallon, said the Department of Energy this afternoon, up 86 cents from a year ago and nine cents from a week ago. The last time gas rose higher than $3.50 was Sept. 29, 2008, when the weekly average hit $3.64.
Analysts said markets were reacting to continuing instability in the Middle East. On trading markets, oil prices returned today to their highest levels since September 2008, settling at $108.47.
Robert Powell, senior analyst with The Economist Intelligence Unit, said oil markets are always skittish about Middle East news. Libyan rebels took hold of a strategic oil town, Brega, over seven weeks after protests against the Gadhaif regime began on Feb. 15.
Powell estimates in his forecast that oil will below $100 a barrel after the third quarter, and gas prices will also decrease.
"There's no need to be too alarmed," he said. "Oil markets are notoriously volatile anyway. So do not panic about daily movements. The key is to monitor trends."
Powell said oil will reach below $100 a barrel despite increasing demand from the U.S. An improved unemployment rate, 8.8 percent, may indicate higher demand from companies and consumers with jobs.
Higher demand and limited oil supplies could lead to higher prices, according to the rules of supply and demand.
Daniel O'Connell, VP of Energy, said he disagrees and anticipates an expensive driving season.
"I only see it getting worse," O'Connell said. "If positive economic employment reports even stay the same, we will be looking at all time highs in the summer. May want to start window shopping for a good bicycle."
