That summer road trip just got more expensive.
After nearly several weeks of steady declines, gas prices surged last week, as unrest in Egypt and other factors sent oil prices soaring. Prices A gallon of regular gas today averaged $3.613, a 14-cent increase in the past week, just in time for the busiest busy summer driving season, according to auto club AAA
“This is the time of year when people are starting to hit the roads,” says AAA spokesman Michael Green. “Given that prices are increasing at the fastest rate in five months, there are going to be a lot of unhappy motorists filling up their tanks.”
Experts say last week’s bump in prices could be just the beginning of the climb. AAA expects prices to increased 10 to 15 cents per gallon in the next few weeks, with a possible continued rise in prices through September.
The gas price hike in gas prices follows a recent run up in crude oil prices, which have jumped to almost $106 per barrel, their highest level in more than a year.
The primary driver behind the increase is unrest in Egypt, which is not a significant producer of oil but it controls the Suez Canal, which is a major thoroughfare for oil tankers in the region, and a major regional oil pipeline.
RELATED: HOW FUEL EFFICIENT CARS DRIVE UP GAS PRICES
“There has been no physical disruption yet,” says Patrick DeHaan, a petroleum analyst with Gasbuddy.com. “But the market has a tendency to panic when there are ongoing geopolitical tensions.”
On top of the uncertainty around Egypt, the gas price increase also reflects a decline in inventory thanks to refinery disruptions, and the increase in consumer demand typically seen in the summer months.
“Since demand is at its highest, the market is more sensitive to disruptions,” says DeHaan. “If this were happening in the winter, the market might shrug it off.”
In late June, demand for gasoline had hit 9.6 million barrels per day, more than a million more than 10 percent higher than typical off-season demand.
Nationwide, prices vary from a low $3.27 in South Carolina to a high $4.29 in Hawaii. Even with the recent increase, the national average price for a gallon of gas is more than 30 cents below their 2013-high of $3.94 a gallon, reached in April, and well below the $4.11 all-time-high reached in July 2008.
Analysts say that prices should come back down after Labor Day, barring a big change in the Middle East or a major storm that hits refineries in the Gulf Coast this hurricane season.
