Don’t panic over rising gas prices
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Bill Radke: Gasoline prices have jumped 20 percent in less than a month. Most of us are now paying nearly a dollar more per gallon than we were a year ago. So what might be next? Marketplace’s senior business correspondent, Bob Moon reports.
Bob Moon: Don’t panic. That reassurance comes from Tom Kloza, chief analyst for the Oil Price Information Service. While it’s true pump prices are now higher than they got all of last year, Kloza is confident this isn’t the start of a trend:
Tom Kloza: We should recognize that we’re not going to see weekly increases of 5 to 10 cents like we’ve seen in the last two or three weeks.
Kloza figures on another 5 or 10-cent rise this month. And he says the national average could spurt to three bucks a gallon in the spring, when refiners switch to more expensive, less polluting blends. But with the unemployment rate hovering around 10 percent and consumer demand still way off:
Kloza: It’s real difficult to make a case for prices above $3 to be sustained for all of 2010. High prices are dependent on a strong economy, and I think that they’re more than speed bumps at this point if they just were to go onward and upward from here.
Kloza blames most of the recent price rise on speculative money that tends to flood the oil markets as the new year begins. But he’s convinced it won’t — or can’t — last.
In Los Angeles, I’m Bob Moon for Marketplace.
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