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Massive flooding lifts gasoline prices

Lundberg survey finds that massive flooding in the Midwest and oil costs sent prices higher reversing a predicted decline in gasoline prices.


ATLANTA (CNN) -- Flooding in Midwest refineries and bloated oil costs reversed a predicted downdrift in gas prices -- instead pushing average prices to $3.0577, 6 cents higher than the average price three weeks ago, according to survey findings released Sunday.

The Lundberg Survey, conducted by a California oil market research firm, said gas prices began rising after June 22.

In the survey released June 27, the average price of gas was $2.9961, dropping below the $3 mark for the first time in two months. The decline had been expected to continue.

Survey publisher Trilby Lundberg said the rise was the result of massive flooding in the Midwest, where heavy rains shut down two major refineries in Whiting, Ind., and Coffeyville, Kan.

"U.S. refining operations are still limping back to maximum use of capacity," Lundberg said. "Some repair and maintenance projects are still being completed."

She said the problems in the Midwest have further exacerbated capacity issues.

In addition, the price of U.S. benchmark grade crude oil rose $4.79 per barrel, closing at $73.93 per barrel on Friday, according to Lundberg.

In light of these setbacks, she said the national 6-cent rise in average gas prices was very small -- aided by the wide range of prices around the nation.

"It's like having one foot in ice, the other in boiling water." she said. "On average they seem similar."

High crude oil prices in the United States are also attracting a high volume of imports from other countries, which is also helping to keep prices from skyrocketing, according to Lundberg.

She predicted that the United States will have high gas prices for at least another month while refineries complete their comeback and summer demand continues.

Of the cities covered in the biweekly survey of some 7,000 gas stations, Tucson, Ariz., had the lowest national average at $2.80 per gallon. Chicago, consistently at the top of the list, stayed there once again with $3.46 per gallon.

Prices jumped the most in the Midwest, where Minneapolis had the greatest increase, up 42 cents from $2.89 on June 22 to $3.31 on Friday.

Here are some prices in other cities:

--Milwaukee: $3.39

--Omaha, Neb: $3.39

--Sioux Falls, S.D.: $3.32

--Minneapolis: $3.31

--Los Angeles: $3.06

--Atlanta: $3.02

--Washington, D.C.: $3.01

--Salt Lake City: $3.00

--Boston: $ 2.95

--Portland, Ore: $2.89

--Houston: $2.85 Top of page

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