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Gas prices climb by 10-cents as oil fetches higher price
YOUNGSTOWn
Gas prices in Ohio on Tuesday climbed to $3.61, pushed higher by fearful investors who drove oil prices to an 18-month high last week over concerns about U.S. intervention in Syria.
The average for a gallon of regular-grade gasoline climbed 10 cents from last week across the state, according to the automotive group AAA, but prices aren’t expected to go much higher anytime soon thanks in part to a boom in North American crude production and President Barack Obama’s decision on Saturday to seek approval from Congress before authorizing airstrikes on Syria.
According to AAA, gasoline prices in the Youngstown-Warren area were up 8 cents from last week with a gallon of regular grade going from $3.44 to $3.52 on Tuesday. That was still below the national average of $3.59, which increased from $3.54 last week.
“There’s tremendous skepticism over any type of military intervention in Syria,” said Greg Laskoski, national senior petroleum analyst at GasBuddy.com. “There may be no action at all, but until we have some clarity on what might occur, when it will occur and the scope and objective, we’ll see a lot of uncertainty in the financial markets. I don’t think prices will go higher or lower, though, until those questions are resolved.”
On Aug. 27, October crude futures jumped 2.9 percent to reach $109.01 a barrel on the New York Mercantile Exchange as a limited strike on Syria seemed imminent, but trading lost steam and prices fell for three days in a row starting Saturday when Obama gave lawmakers an opportunity to debate any attack when they return from summer recess Sept. 9. At the close of electronic trading on Labor Day, West Texas Intermediate — or light, sweet crude oil — settled at $106.82 a barrel.
Laskoski said higher gasoline prices Tuesday reflected last week’s oil prices on Wall Street. On Tuesday, WTI had climbed above $108 a barrel, but Laskoski wasn’t concerned about gas prices soaring higher in the Great Lakes region or any other part of the country.
According to the U.S. Energy Information Administration, gas prices were stable heading into the Labor Day weekend, with the U.S. national average retail price moving downward from a summer peak of $3.68 reached July 22 to $3.55 per gallon at the beginning of last week. That price was lower despite an increase in crude oil prices in July.
Bevi Powell, a spokeswoman for AAA East Central in Pittsburgh, said an estimated 5.3 million people in Illinois, Indiana, Michigan, Wisconsin and Ohio traveled 50 miles or more by car during the holiday weekend — up 3.5 percent from last year when consumers paid about 30 cents more for a gallon of gas.
Beyond Syria, an ailing stock market and other geopolitical issues in the Middle East have pulled investors in recent weeks toward hard assets such as oil and pushed the price up.
“It’s not automatic that any military action, especially something solely contained to Syria, would be disruptive from an oil perspective,” Laskoski said. “Sure, we might see some spikes, but it certainly won’t be anything dramatic.”
Barring any major weather events that could affect refineries and disrupt supplies, gas prices are expected to remain moderate heading into the fall as demand for gasoline typically drops nationwide after Labor Day weekend.
U.S. oil production also has spiked by 2 million barrels per day since 2011 with an increase in onshore shale gas drilling. Canadian and Mexican oil fields continue to pump out a steady supply for the U.S as well.