Within the past 30 days, the cost of WTI crude oil increased 15% to top $108 per barrel.
Every time gasoline prices increase more than a few pennies in a week, drivers start wondering what’s going on. Last week, the cost of gasoline jumped 12 cents, and some analysts say this will continue, KETK-TV reports.
Within the past 30 days, the cost of WTI crude oil increased 15% to top $108 per barrel. During the same time, oil stockpiles have been drawn down. “Oil prices and gas prices are as much about the ‘what if.’ It’s about what could happen. It’s a commodity,” said Jeff Lenard with NACS.
With supplies pretty much the same as they have been for the past five years, and demand lower, what’s driving up gasoline prices? Speculation. “And when there’s uncertainty, commodities increase in value,” he said. “When there’s uncertainty in the stock market, prices go down because they’re not sure about the company. When there’s uncertainty about the commodity, prices go up and that’s what we’re seeing now, largely because of Egypt.”
On Wall Street, hedge fund speculators have snapped up more oil than Oklahoma has sitting in giant oil terminals. “The classic example is what happened five years ago,” said Lenard. “We had gas run up to $4.11 a gallon in mid-July. People were talking about $5 gas, $6 gas. It ended the year at $1.61, dropping by $2.50.”