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Dayton
Business Journal...
Gas prices at $5 per
gallon possible
by DBJ Staff
Sunday, April 10, 2011
With violence in Libya and the Middle East sending oil prices even
higher, gas prices have soared in the past several weeks to near $4 per
gallon. But several petroleum industry analysts say gas prices could
reach record prices this summer, even hitting $5 per gallon.
Gas prices have increased 50 cents in Dayton during the past month, and
have jumped 25 cents this past week. The region’s highest price Friday
was $3.89 per gallon, and many stations were charging between $3.80 and
$3.85.
On Saturday, regular gallons of fuel averaged $3.79, up 18 cents from
last week and more than 40 cents higher than last month, according to a
AAA Fuel Gauge Report.
But in what could be bad news for the region this summer, current gas
price averages in the Dayton region are nearly a full $1 more than this
time last year, with more than a month until the Memorial Day holiday
kicks off the summer driving season.
Much of this comes as oil continues to climb, having soared 25 percent
to $113 per barrel in the past several months, and nearly doubled from
$68 per barrel last summer, according to oil-price.net.
With oil up as much as it is and gas prices already pushing close to $4
per gallon before the summer driving season starts, many analysts are
predicting that we could pay $5 per gallon at the pump in the next
several months. But they caution that the fighting in Libya and Syria
would need to spread to another major oil producing country such as
Saudi Arabia for consumers in the U.S. to see the $5 per gallon mark
this year and spark an energy crisis.
“We could see $5 a gallon if things take a turn in the Middle East.
Right now, we’ve lost Libyan oil. If you lose one more country’s oil,
or put it at risk, then I think the possibility of $5 a gallon is a
real one,” PFGbest oil analyst Phil Flynn told Fox News in Chicago
recently.
Energy costs have a huge impact on businesses, both consumer and B2B.
Economists say high oil and gas prices affect more than just prices at
the pump, and can hit everything from transportation to exports and
even consumer spending.
Rising gas prices can have a serious impact on U.S. trucking companies
as well, and the Dayton region has long been a hub for trucking
companies because of its central Midwest location and the intersection
of Interstates 75 and 70.
The oil spike also has hurt airlines, with many carriers that fly out
of Dayton International Airport raising prices for airfares as much as
30 percent in recent months.
For investors, the surge in oil and gas prices has meant strong returns
in recent months for energy sector investments.
Manufacturers such as General Motors, Ford Motor Co., Toyota Motor
Corp. and Honda Motor Co. can be hit too. When gas prices surged to $4
per gallon in the past, sales of gas-guzzling auto models such as SUVs
tanked as consumers turned to smaller, more fuel-efficient vehicles.
Read the story with links and a poll at Dayton Business Journal
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