Here's some answers about why gas prices have pushed past records nationally ($3.25 a gallon and rising) and near records locally in Columbia ($3.15 and rising).
The information comes from reports by The Houston Chronicle, The Associated Press and State Assistant Business Editor Andrew Shain, who compiled this entry:
We have enough gas, right?
Why, yes.
Crude supplies jumped by 6.2 million barrels the week of March 3, more than three times analysts’ forecasts, the government said. This was the eighth increase in crude supplies in nine weeks.
The government also reported that gasoline supplies rose by 1.7 million barrels the week of March 3, well above the expected 300,000 barrel increase. Supplies are up more than 10 percent since the beginning of the year, according to federal data.
Are we using less?
Apparently so.
Gasoline consumption fell 0.7 percent the week of March 3 compared to the same week last year.
Normally, gas consumption grows about 1.5 percent year-over-year, just to keep pace with population growth.
So why are gas prices rising?
Because much of the cost of gas comes from the cost of oil, which have just skyrocketed to levels few imagined even a year ago.
(And yes, there are other factors -- such as limited refinery capacity and taxes -- but gas doesn't rise 30-35 cents in a month because no U.S. refineries have been built since the 1970s or because S.C. and feds tack on an extra 35 cents a gallon.)
And why are oil prices rising?
The dollar has reached new lows against the euro, attracting new buyers to the oil market. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Many analysts believe the dollar’s decline is the reason crude futures have surged to new records during the past three weeks to hit $111. This is despite the fact that crude supplies have risen 10.2 percent since early January.
Will we see $4 gas?
Even the feds are admitting there's a chance -- in some places nationally.
The Energy Information Administration said last week “there is a significant
possibility that prices during some shorter time period ... will cross
the $4-per-gallon threshold.”
The EIA anticipates pump prices will peak at a monthly average of $3.50 a gallon sometime this spring as more motorists hot the road.
That would surpass the inflation-adjusted record of $3.40 a gallon set in March 1981.
