Gas prices to stay high through summer

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Gas prices will stay high during the summer, but probably won’t get worse according to the Energy Information Administration. At Don’s Chevron, on South Main Street in Weatherford, regular unleaded gas sold for $4.09 per gallon earlier this month, the highest it’s been in 40 years, owner Don Carney said. JUDY SHERIDAN

June 14, 2011

Judy Sheridan Weatherford Democrat The Weatherford Democrat Tue Jun 14, 2011, 08:00 AM CDT

WEATHERFORD — Gas prices remain high, but they shouldn’t get worse through summer vacation month according to a recent announcement from the Energy Information Administration.

“Petroleum experts” and local business owners tend to agree.

Patrick DeHaan, senior petroleum analyst, said gas prices have peaked in May for the past two years, reflecting the temporary supply problems created by the changeover from winter to summer gas and the beginning of the summer driving season, which kicks off around Memorial Day.

“There could be a rise later on, depending on the hurricane season,” he said. “There’s a lot of infrastructure in the Gulf of Mexico. Twenty percent of the refineries are in the paths of potential hurricanes.”

If storms don’t prove to be a factor, DeHaan said, prices for regular unleaded gas will probably range from $3.50 to $4 per gallon for the next few months.

About a month ago, across the nation, the average price per gallon for regular, unleaded gasoline was $3.94.7, Jason Toews, GasBuddy co-founder, said. Friday’s price was $3.72.1.

“And I expect it to go down another 12 or 15 cents per gallon by the end of June,” he said.

“It may spike at the end of August, but I don’t think it’s going to break the all-time high of $3.96 set in early May,” he said. “It could get up to $3.80, $3.85.”

Toews said gasoline prices are closely tied to the price of crude oil — more than two-thirds of the price of a gallon of gas reflects the crude oil price — and gas stations have no choice but to pass the costs along as wholesale prices rise.

“They typically move quickly to react to the wholesale prices and raise gasoline prices in large increments because they don’t want to raise it too frequently,” Toews said.

“But when gas prices go down there is little incentive to lower the cost if your competitors don’t,” he said. “Gasoline stations make more money when the price is going down.”

Thomas Gafford, owner of Exxon On the Run on Santa Fe Drive in Weatherford, said he sets his gas prices low as a way to draw people into his store.

“I’m not making much money on gasoline,” he said.

Gas prices have peaked, he believes, based on the recent decline in the stock market, lower crude oil prices and a housing market that appears to signal another dip in the economy, resulting in lower demand.

Gafford’s regular unleaded gas prices rose to $3.95 per gallon in mid to late April, and now stand at $3.42. He speculates prices will continue to fall in the next six to eight weeks to a level of $3.29 to $3.37.

“They’re not going to get below $3,” he said.

Don Carney, owner of Don’s Chevron, a full-service gas station at 501 S. Main St. in Weatherford, said he thinks prices this summer will fluctuate between $3.65 per gallon and $3.90 per gallon for regular unleaded gasoline.

“It may go back up somewhat, but not as much as the highest,” he said.

He has little control over gasoline prices, Carney said. They are set by his company for 24-hour periods except for weekends, when the price set Friday after 6 p.m. lasts until Monday at 6 p.m.

“It changes every day, but that doesn’t mean we change our prices every day,” he said. “I sell a load of gas according to what I pay for it.”

In addition to the rack price set by Chevron, Carney must pay a distributor fee and a freight fee.

Carney’s price for regular unleaded gas right now is $3.95 per gallon. The price will stay the same until he finishes the 900 gallons in his tank.

“By next Tuesday or Wednesday, it will probably be 20 cents cheaper,” he said.

At Don’s Chevron, the charge for regular unleaded gas rose to $4.09 per gallon this month, Carney said, the highest it’s been in 40 years.

“We never get a real concrete, for-sure answer [about why prices go up],” he said. “I’ve read all kinds of stuff. Speculation may cause it.”

In recent efforts to keep gas prices down, Sen. Jay Rockefeller, D-W. Va., has targeted oil speculators who may drive up current market prices by betting on oil price futures.

“That’s bad for Americans who are struggling to make ends meet,” he said.

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Gas prices to stay high through summer

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