Wendy Reuer, Published February 21 2013
Gassed at the pump
The average price of gas in Fargo as of Wednesday was $3.69 per gallon, 70 cents higher than last month and 30 cents higher than this time last year, said AAA Spokesman Gene LaDoucer.
Fargo remains the cheapest city to find gas in the state. The price is $3.74 per gallon in Minot, and $3.77 in Bismarck, Grand Forks and Williston. In Dickinson, gas is $3.80 per gallon.
The national average price of gas is $3.76 per gallon, a record for this time of year.
The 2012 annual average price of gas in the U.S. was $3.60.
“We still believe that when 2013 comes to an end, the annual average for gasoline will not be as high as it was in 2012, which was a record,” LaDoucer said.
Price increases were expected in late February or early March when fuel stations drain the cheaper winter fuel supplies and begin purchasing the higher-priced summer blends of gas in advance of the busy travel season. But this early increase was a surprise to some when economic indicators were promising and crude oil prices were low.
When gas prices hit a record high of $4.11 in 2012, oil was selling for about $145 per barrel. Oil is only $94 per barrel now, LaDoucer said.
He said oil and gasoline futures were trading even lower this week, by about 3 percent.
“If that holds, we should see a halt to the increase and perhaps a modest decline in gas prices,” LaDoucer predicted. “It’s too early to tell if this is a short-term pause or if it’s something that will take hold and allow this increase to come to a halt.”
Bart Chilton, a commissioner on the Commodity Futures Trading Commission, has led a national movement to seek limits on control over oil markets.
Instead of end users of oil dominating the markets, financial institutions now control the trading.
“It’s speculators who are moving the markets,” Chilton said. “They are almost exclusively the entire market at certain periods of time.”
Along with supply and demand, factors such as the national economy, unemployment rates and geopolitical clashes can affect oil prices.
The U.S. now produces more than half of the oil it consumes. The U.S. Energy Information Administration projects U.S. oil production will rise from 6.89 million barrels per day in November 2012 to 8.15 million by December 2014.
And although North Dakota oil production continues to boom, LaDoucer said it is unlikely that will much have of an effect on gas prices.
“Because we have a reliable domestic source, disruptions in the Middle East won’t have as large of an impact on global oil prices,” he said.
While dipping unemployment rates and record-making stock markets might signal lower gas prices, LaDoucer said the opposite is true.
“When the economy is strong, when it’s improving, we see higher prices for oil and gasoline because we’re using more oil and gasoline,” he said.
LaDoucer said to slow the soaring gas prices, consumers will need to cut back on consumption, which will likely happen if prices near the $4 mark again.
He said consumers have historically made significant changes in gas-buying and car-buying habits to curb the high prices.
McClatchy Newspapers contributed to this report.
Readers can reach Forum reporterWendy Reuer at (701) 241-5530
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