Are Higher Gas Prices on the Way?

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Oil Prices
AP Photo/Toby Talbot
By Sharon Epperson

The slide in gasoline prices has finally stalled.

Nationally, gasoline prices rose for the first time in nearly two weeks on Wednesday. The national average price for regular gasoline jumped nearly a penny overnight to $3.19 a gallon, according to AAA, marking its biggest one-day gain since Oct. 16 and first increase in 12 days. This bounce comes just after prices around the nation had fallen to their lowest levels since February 2011.

Abundant supplies and sluggish demand contributed to the sharp fall in gas prices recently-and prices are still declining in some parts of the country. In 10 states in the South Central region, the average price of gasoline statewide is below $3 a gallon, according to GasBuddy.com.

"I wouldn't call this a spike," said Tom Kloza, chief oil analyst at GasBuddy.com. "Most of the strength (in gasoline prices) is regional, and it is lifting RBOB (gasoline) futures more than various markets."

Gasoline futures have climbed in part due to refinery issues on the East Coast. Nymex RBOB gasoline futures, a leading indicator for retail gasoline prices, have risen more than 10 cents (or 4 percent) in four days to a high of $2.63 a gallon on Wednesday morning.

Gasoline prices also closely follow the rise in oil prices globally. In addition to supplies from U.S. refineries, gasoline is also imported into New York Harbor. As a result, gasoline futures traded at the Nymex often closely follow Brent crude-the global benchmark for oil prices-which has rallied sharply recently, said Andy Lipow, president of Lipow Oil Associates.

Supply disruptions in Libya and concerns about the failure to reach an agreement over Iran's nuclear program have sent Brent crude futures soaring about $4 a barrel since last week to over $107 a barrel on Wednesday.

Analysts said that historically, gasoline prices reach the lows of the year between Election Day and Christmas week. But the holiday season often sees an increase in demand as well, said energy trader John Kilduff, a partner at Again Capital.

"You'd expect an uptick at the pump during that Thanksgiving time period, but I would not expect a lot though, and you could see it falling off at the end of this year," he said.

Increasing gasoline supplies could keep a lid on a significant price rise, added Kloza. "Lots of U.S. refiners are coming back from maintenance, and it will be difficult for the gasoline market to sustain any gains as that equipment puts more gasoline on the market," he said.

Kloza said there may be a few small bounces in gasoline prices, but "no serious increases in retail prices until 2014," he said. Lipow disagrees. He expects the national average price to climb back to $3.25 a gallon in the next 10 days.

-By CNBC's Sharon Epperson. Follow her on Twitter: @sharon_epperson. CNBC Executive Editor Patti Domm contributed to this report.

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20 Comments

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IN MY OPINION ONLY

Not surprised, as expected.

November 16 2013 at 11:42 PM Report abuse rate up rate down Reply
willypfistergash

Everyone better buy a pickup truck. They're gonna have to load the bed with cash to fill it up. Inflation is coming y'all...Think post WWI Germany, where folks were taking wheel barrow loads of cash to the grocery store to buy a loaf of bread.

And I don't think Yellen is in any hurry to stop the bond purchases and printing.

November 15 2013 at 2:43 PM Report abuse -2 rate up rate down Reply
burgesswv

For your info :
The money collected from European petro sales is called a USER FEE. Therefore, its no SOCIALIZED PROGRAM.
As for the bad times we are facing, the tea partiers are largely to blame, as they blocked any & all legislation for job creation. Just look at the way the consevs voted against infrostruction repair & replacement, to get some idea of how the political deeds are slowing down jobs growth.

November 15 2013 at 1:59 AM Report abuse +1 rate up rate down Reply
4 replies to burgesswv's comment
willypfistergash

Demand is down due to hugobama's effed up economy.

November 14 2013 at 11:47 PM Report abuse -1 rate up rate down Reply
burgesswv

We should do as the Europeans do - pay for our health care from petrol sales. This way, it cannot be called a socialized medical plan, and we we would be assured of a steady source of revenue for our American society;s needs.

November 14 2013 at 9:35 PM Report abuse rate up rate down Reply
1 reply to burgesswv's comment
willypfistergash

how is it not socialized medicine?
Boy, that free european health care sure is expensive.

November 14 2013 at 11:45 PM Report abuse -1 rate up rate down Reply
2 replies to willypfistergash's comment
fire.teapartyin2014.bob

America holds the record for the most expensive health care in the world.

November 16 2013 at 11:06 AM Report abuse +1 rate up rate down
willypfistergash

Only because cosmetic/plastic surgery is counted...guess what. We also spend more per pupil than any developed nation...shouldn't we be getting better results?

November 16 2013 at 12:52 PM Report abuse rate up rate down
larrysheetmetal

Yeah I called this a month ago !!!!! Watch AAA will make anouncements and gas prices will go up even thought we (USA) exported more oil than we imported in OCT. . Also, this Holiday gas price increase is bull sh-t if a family travel 20 to 30 miles to go to work then travel 100 miles to see grand parents how are using more fuel? Same thing with vacations to the mountain ,shore, parks etc.

November 14 2013 at 7:55 PM Report abuse rate up rate down Reply
Big John

Can anyone remember when gas prices went from $1.00 a gallon to $4.25 a gallon and who was in the White House when it happened? A little hint; his family is in the oil business.

November 14 2013 at 7:45 PM Report abuse +1 rate up rate down Reply
1 reply to Big John's comment
willypfistergash

It was ~$1.50 a gal when clinton was in officfe. Can you remember when gas prices averaged $1.84/gal in Jan. 2009? Do you rmember who moved into the white house with his fat America-hating wife at that time?

November 14 2013 at 11:47 PM Report abuse -1 rate up rate down Reply
2 replies to willypfistergash's comment
fire.teapartyin2014.bob

Bush's wife was fat.

November 16 2013 at 11:07 AM Report abuse +1 rate up rate down
willypfistergash

Laura bush wasn't telling everyone else that they were fat. Mooochelle is bigger than her husband hugo.

November 16 2013 at 12:54 PM Report abuse rate up rate down
createidea

Are Higher Gas Prices on the Way?

When were they ever low ?.....

November 14 2013 at 10:37 AM Report abuse +2 rate up rate down Reply
jdykbpl45

Sooner of later. The Fed is printing plenty of cash. Inflation is coming.

November 14 2013 at 8:39 AM Report abuse -1 rate up rate down Reply
1 reply to jdykbpl45's comment
willypfistergash

I know, right? Yellen has her work cut out for her. How is she going to balance the tapering or discontinuance of the Fed Res QE with controlling inflation? And not just a little inflation...Whole bunches

November 15 2013 at 2:40 PM Report abuse -1 rate up rate down Reply