Gas prices on the rise due to summer season
As the local temperatures rise, prices at the gas pumps are trending upwards as well.
However, AAA spokesperson Clay Ingram said prices shouldn’t come anywhere close to the $4 mark, which is what gas cost a year ago.
“It’s just sort of that time of year when our gas prices are moving up because our demand is going up,” Ingram said. “Fuel prices have been around $70 a barrel, give or take a couple dollars, for a few weeks. It looks like it might level out at that price for a while, and if that happens, we should see our gas prices level out as well.”
According to AAA, the current average gas price for the Birmingham metro area is $2.52, up from $2.19, the average price a month ago. A year ago, however, the average gas price for the Birmingham area was $3.93.
Even though Birmingham’s gas prices have risen by $0.33 in a month, Ingram said that type of rapid price increase is normal in the summer. He said, however, that prices have increased for 52 consecutive days, which is unusual.
Ingram said increased optimism about the economy is another, smaller factor adding to the price increase.
“There is some optimism out there that our economy is going to be turning around,” he said. “That optimism causes people to buy energy commodities, and that includes crude oil futures. The stronger the demand, the more it drives the price upward.”
Despite that optimism, Ingram said demand for gasoline right now is 4 percent less than it was last year. Usually, demand for gas increases by 1 percent every year.
“To go from a 1 percent increase every year to a 4 percent decrease is a very significant amount,” he said. “That may not sound like much, but that is a tremendous decrease.”
While fuel prices will likely jump more around the Fourth of July and again around Labor Day, Ingram said he didn’t think prices would reach the $3 mark, but cautioned that he didn’t know that to be a certainty.
“We’ll definitely see some increases around the Fourth of July weekend. We usually get a little bit of a jump around Labor Day, but that usually signals the end of summer driving season,” he said. “At least, that’s the normal trend. I’ve learned over the last few years, you just never know what’s going to happen.”