Gas prices climb 30 cents a gallon

@CNNMoney August 7, 2012: 3:12 PM ET
Gas prices jump 30 cents from recent lows as oil prices climb and refining trouble plagues the United States.

Gas prices jump 30 cents from recent lows as oil prices climb and refining trouble plagues the United States.

NEW YORK (CNNMoney) -- Gas prices continued their slow but steady march higher Tuesday, surpassing a nationwide average of $3.63 cents a gallon on the back of refinery problems in the United States and higher crude oil prices globally.

Nationwide average gasoline prices are now 30 cents higher than they were just five weeks ago. They are now at the midway mark between this year's high price of $3.94 a gallon -- hit April 5 -- and the recent low of $3.33 hit just over five weeks ago, according to AAA.

By this weekend, gasoline prices will likely be higher than they were a year ago at this time, according to Tom Kloza, chief oil analyst at the Oil Price Information Service.

The rise is being partly driven by a series of refining and transportation problems in the Midwest and on the West Coast.

Last month an Enbridge (ENB) pipeline was shut down in the Midwest after a leak. July also saw problems at a BP (BP) refinery outside Chicago, and at a Marathon (MRO, Fortune 500) refinery in the region, said Kloza.

Worse, on Monday night a massive blaze shut a Chevron (CVX, Fortune 500) refinery in California -- the state's second largest. Kloza said gasoline futures in the state spiked 30 cents a gallon Tuesday.

Oil's rise: Crude oil prices have also rallied recently, jumping nearly 20% in under six weeks.

Traders have blamed a host of things on the runup.

Fears over a confrontation with Iran were cited last month, while more recently the chaos in Syria is making markets nervous about any spillover effect to the broader region -- home to 60% of the world's oil reserves.

While the economy remains lackluster, speculation that central banks will ease monetary policy has helped fuel a jump in both stock and commodity prices across the board, including oil.

Tropical Storm Ernesto and some production problems in the North Sea also appear as factors.

Even recent reports of declining factory orders in Germany and construction activity in Italy have failed to dampen oil prices, said Matt Smith, a commodities analyst at Summit Energy in Louisville, Ky.

"A market that doesn't sell off on bearish news is not bearish," Smith wrote in a research note Tuesday. "Hence we must accept that this recent rally in crude is not quite over yet."

Crude's influence on gasoline prices may be waning though.

Kloza said he expects gas prices to tick marginally higher for the next couple of weeks, but not to approach the $4 mark. Still, it will likely be fodder for political debate.

"As we enter the [political] convention periods, this will lead to a cluster of rhetoric on both sides," said Kloza.

The $4 mark is the level many economists think caused consumers to really pull back spending on other items, thus cutting into economic growth.

After Labor Day, Kloza said gasoline prices should start declining, no matter what happens to the price of crude.

"The one caveat is tropical storm season," he said. "If [forecast] cones start to shadow the Gulf Coast, you'll see rallies."  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.98%4.08%
15 yr fixed3.09%3.11%
5/1 ARM3.20%3.22%
30 yr refi4.06%4.16%
15 yr refi3.17%3.20%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
CNNMoney Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.