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What's goosing gas prices

Monday, August 20, 2012 - 02:09

Aug 20 - As Labor day weekend approaches, a variety of factors are driving gasoline prices higher, at a time they usually head south. Bobbi Rebell reports.

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Americans are squeezing in the last weeks of summer before heading home and back to school. But one thing is different this year. Gas prices are heading higher, when they usually head south. REPORTER BRIDGE: BOBBI REBELL, REUTERS REPORTER (ENGLISH) SAYING: "According to AAA, prices for regular gasoline have risen from an average of $3.46 cents a gallon a month ago- to $3.72." Alison Ciaccio, of Platts, the energy and market information arm of McGraw-Hill explains: SOUNDBITE: ALISON CIACCIO, OIL FUTURES EDITOR, PLATTS (ENGLISH) SAYING: "Sanctions that have come against Iran and this is over the nuclear program that has happened there and really that's come into effect since July 1st and since then we've seen oil prices on average up about 15-17 percent so that's really driving the price of gasoline." Ciaccio says optimism there will be upcoming Fed stimulus could lower the value of the dollar, and in turn boost the cost of oil. Europe is also a factor- because some east coast refineries use Brent North Sea Crude: SOUNDBITE: ALISON CIACCIO, OIL FUTURES EDITOR, PLATTS (ENGLISH) SAYING: "What is happening in Brent when we talk about the North Sea oil fields they are putting on a lot of maintenance that is going to be happening, so output is going to shrink, so there is going to be tight supplies through September, so that is really also putting a crunch on the supply base that comes into the U.S. and translates into higher gasoline prices". And there are also regional production issues including the recent fire at a California refinery. AAA New York Spokesman Robert Sinclair Jr.: SOUNDBITE: ROBERT SINCLAIR JR., SPOKESMAN, AAA NEW YORK (ENGLISH) SAYING: "There have been some problems with pipelines: The Enbridge pipeline in Illinois and a refinery in Illinois, the Chevron refinery at Richmond California, which accounts for about 15% of California's gas supply; So we've seen regional spikes where in Illinois gasoline statewide is about $4 a gallon, same thing in California." Also playing into prices: the drought in the Midwest has caused a rise in corn-based ethanol prices. U.S. law requires that a certain amount of ethanol be sold- and a lot of it gets blended into gasoline. Bobbi Rebell, Reuters.

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What's goosing gas prices

Monday, August 20, 2012 - 02:09