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The ups and downs of gas prices



Published: Fri, May 3, 2013 @ 12:10 a.m.

photo

A fuel truck delivers gas to a station on Mahoning Avenue in Austintown. Drivers have seen gas prices go up in the Valley, but this is normal for the spring season, according to experts.

Staff report

YOUNGSTOWN

Drivers have seen gas prices go up in the Valley, but this activity is normal for the spring season, according to experts.

Wholesale prices spiked due to the switch from winter-blend gasoline to the summer blend, which caused the retail gas stations in the area to raise prices.

“In the southwest part of your state, there are some requirements for summer-blend gasoline that even meets higher standards than federal regulations,” said Gregg Laskoski, a national senior petroleum analyst for Gasbuddy.com. “That is partly responsible for the uptick in wholesale prices.”

Over the past week, average gasoline prices in Youngstown went up about 10 cents, from $3.62 to $3.73, according Bevi Powell, vice president of community relations for the American Automobile Association.

A range of prices from $3.59 to $3.79 for regular gasoline could be found today in Austintown, for example.

Gas prices, however, are 3 cents less today than they were a year ago, according to Powell.

The AAA Gas Report released April 29 announced that national gas prices in April were the lowest they have been since 2010. To compare, in 2012 the national average for a gallon in April was $3.89, and this year the average was $3.55.

To follow air-quality guidelines, southern parts of Ohio and areas of western Pennsylvania are required to have a Reid vapor pressure (RVP) of 7.8 for the summer blend, while in the winter they can have an RVP between 11 and 15, according to Laskoski. Most of the other areas of the country are required to have an RVP of only 9.

“As the refineries have to meet the demand for the summer-blend gasoline, there are some parts of the country that are very tight because of state requirements or in some instances county requirements for even stricter blends,” Laskoski said in a phone interview.

The U.S. Department of Energy’s inventory shows that there is a large amount of crude oil, so consequently crude oil prices dropped almost $3 a barrel, which means gas prices should go down in the future, according to Laskoski.

“I would say nine times out of 10 when you hear crude oil prices are coming down, usually retail gasoline prices follow the same pattern,” Laskoski said.

Mekael Teshome, an economist from PNC Bank, also does not believe there will be a large increase in gas prices other than the normal volatility.

“Economic growth will lead to modest increases in demand going forward, but the supply will also match that, so I do not expect gasoline prices to really move much,” Teshome said.

Alli Altawil, owner of Canfield Express Mart, said he was not surprised by the small increase in gas prices, and he believes it could have been much higher.

“In my business view, it has been stable for a while,” Altawil said. “Sometimes it increases. This is business.”

AAA released a report stating that gas prices will drop around midsummer to $3.20 to $3.40, if the price of crude oil keeps dropping. Currently, the five states with the highest gas prices are Hawaii ($4.34), Alaska ($3.97), Illinois ($3.91), California ($3.90) and Michigan ($3.79).

“I wouldn’t be too alarmed by the uptick in prices you saw this week, because by the end of this week you might see prices lower,” Laskoski said.


Comments

1Spence(23 comments)posted 1 year, 6 months ago

There are a number of things going on, but they are all about skimming money. On the refined products the refineries are manipulating gasoline prices with tons of excuses. At he same time the crude oil prices are also being manipulated. Not so very long ago (1990's) the Commodities Futures Trading Commission (CFTC) highly regulated the trading of commodity futures by limiting those who could trade in the market to either producers or users of the commodities they were buying and selling together with a small number of speculators who were capable of taking heavy losses. The reason that any speculators were allowed in the market was to provide additional liquidity. Today, nearly anyone who has adequate financing can buy and sell commodities. What we have now in commodity trading is increased volatility. The increased volatility is exactly the opposite of what the commodity exchanges were originally set up to do which was to add stability to the market so that both buyers and sellers would be able to run their business in a less risky environment. In today's world the name of the game is to make money for the speculators by churning the market with high volatility at the expense of buyers and sellers who actually produce and use the products. Part of the Wall Street gambling casino. That is one of the main reasons that we are seeing continuous daily fluctuations in the price of gasoline and airline tickets and even airline bankruptcies. All part of deregulation.

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2JoeFromHubbard(1072 comments)posted 1 year, 6 months ago

You can thank the Federal EPA for many of the problems of gasoline prices. Due to the fact that there are several "blends" of gasoline across the country, when one area is low on supply, another area's gasoline is not permitted to be transferred to meet the demand. This causes an upswing in price in the area of tight supply.

Gasoline should be like Coca Cola, a commodity that is the same composition everywhere in the country. The environmentalists are responsible for a large part of the cost of living these days.

That is just the way the market works.

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3Askmeificare(700 comments)posted 1 year, 6 months ago

Joe from Hubbard:

I sure do like your comment against these flaming liberal tree huggers:

"The environmentalists are responsible for a large part of the cost of living these days."

These flaming liberal tree huggers are spreading their ilk everywhere and by god their venom has poisoned the youth of today as well. Sweet Satan, why are these tree huggers allowed to reproduce and spawn children of poisonous minds.

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4JoeFromHubbard(1072 comments)posted 1 year, 6 months ago

@ Askmeificare:

Thank you.

Back in the day of steel mill smoke stacks pouring out the sign of industrial prosperity, when most able bodied people were employed, we all survived quite well.

If one states a desire to return to those days, the environmentalist wackos think that means polluting and poisoning ourselves. It didn't kill us then and wouldn't do it now. But, we'll never know because the wackos have helped kill the industrial base in this country.

Why do you think so much of American business has been shifted to off shore facilities?

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