Gas prices' midwinter spike takes motorists by surprise
DALLAS - U.S. consumers facing the highest gasoline pump prices ever for February may see further increases as global crude oil futures climb and breakdowns and seasonal maintenance at refineries reduce fuel supplies.
Gasoline futures have surged 11 percent this year, making the fuel the top performing commodity in the Standard & Poor's GSCI index. Prices at the pump are up 14 percent this year and have risen 33 straight days, according to AAA data. Brent crude in London, the pricing basis for gasoline imports and for oil used by coastal refiners, advanced to a nine-month high Feb. 8.
Unit breakdowns and seasonal repairs reduced refinery processing by 8.3 percent since mid-December, cutting fuel production, Energy Information Administration data show. Regular gasoline has jumped 45.6 cents this year, the fastest increase in AAA data back to 2005. Prices may peak earlier than they did last year, according to Avery Ash, a spokesman for AAA, the nation's largest motoring organization.
"What's driving the price up is the fear we might not have enough supply," said Jason Schenker, president of Prestige Economics, an Austin, Texas-based energy consultant. "It's a national concern."
Gasoline for March delivery advanced 1.79 cents to $3.3145 a gallon on the New York Mercantile Exchange Feb. 15, the highest settlement since Sept. 28. Brent crude on ICE Futures Europe exchange has increased $5.73 this year to $116.69 a barrel.
The average nationwide pump price gained 1.8 cents to $3.748 a gallon, 19.2 cents higher than a year ago, AAA said on its website Tuesday. In 2008, when prices reached an all-time high of $4.114, regular gasoline cost $3.032 on Feb. 18.
For Paul Hebert of Manchester, N.H., who was filling up Tuesday night, the higher prices, coupled with his 120-mile round-trip commute each day to and from his job as a computer technician in Hudson, Mass., mean he can afford no frills in his life.
"I've cut back on everything," he said. "Movies, eating out; I don't do any of that anymore."
Nicole Daniels of Fremont, N.H., said she was grateful that the prices didn't spike before Christmas.
"I think it's ridiculous," she said of the prices, which were $3.719 per gallon at the Manchester station where she was filling up.
She said she has a 56-mile round-trip commute for work.
"I can go to work and come home. That's pretty much it," she said.
Seasonal maintenance typically peaks in March and April, boosting speculation that inventories may dwindle just as demand picks up in May when U.S. drivers head off on vacation.
An average of 1.5 million barrels a day of refining capacity will be offline for planned work from January through May, according to Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consulting company in London. The outages will peak in March at over 2 million barrels a day, Sen estimated.
Prices climbed as high as $3.936 last year in early April, according to Heathrow, Fla.-based AAA.