Gas prices continue to climb - East Valley Tribune: Business

Gas prices continue to climb

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Posted: Thursday, May 28, 2009 5:54 pm | Updated: 1:53 am, Sat Oct 8, 2011.

The price of gasoline continued its rapid climb this week, driven by the higher price of crude oil and anticipation of greater demand during the summer driving season.

The price of gasoline has risen more than 21 percent in the past month in Arizona, said Linda Gorman, public affairs director for AAA Arizona, which tracks gasoline prices.

Gas prices on the rise for summer driving

The average price of self-serve regular gas stands at $2.28 this week in the East Valley, up 18 cents in the past week, the association said. That compares with $3.79 at this time last year.

Statewide, motorists are paying an average of $2.30, an increase of more than 16 cents in the past week.

Arizona also has lost its distinction for having the lowest fuel prices in the nation after a three-week run, the motor club said. This week, Arizona's average is the fourth lowest in the contiguous 48 states, with South Carolina now enjoying the lowest average at $2.27.

California motorists are paying the most at an average of $2.68 a gallon.

Looking ahead, Gorman predicted even higher prices, though not as high as a year ago.

"We're likely to continue to see fuel prices inch up in the short term before settling in the mid-$2 range for the remainder of the summer," she said.

The price of crude oil, the primary ingredient in gasoline, continues to be the major factor in the price of gasoline, Gorman said.

On Thursday, the commodity hit a six-month high of $65.08 a barrel amid indications the long economic slide may be starting to turn.

Earlier Thursday officials of the Organization of Petroleum Exporting Countries, meeting in Vienna, announced they will leave their current crude production levels unchanged.

Even though a huge glut of oil remains on world markets, OPEC President Jose Maria Bothelo de Vasconcelos said the organization sees hints of an economic upturn.

Signs that OPEC production cuts may finally be reducing the glut have showed up weekly in U.S. government reports about the level of unused crude in storage. The government reported Thursday that U.S. oil supplies dropped unexpectedly by 5.4 million barrels last week. Though crude inventories remain near 19-year highs, it was the third week in a row that supplies have fallen.

With petroleum prices, "the biggest drag until now was the oversupply in everything. That's starting to change slowly," said Phil Flynn, an analyst at Alaron Trading Corp. "We saw the big pad of crude oil drop a little bit. And demand for oil has probably bottomed out. We may see demand start to go up."

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