Crude Oil Hits 2010 High – Gas Prices Follow Suit

After relative stability throughout the Thanksgiving holiday travel period, gas prices, like crude oil, have once again begun trending upward this week. The national average price of regular grade gasoline was $2.90 Friday, up 10 cents in the past month and 27 cents above year-ago prices. Yet, gas prices are $1.21 below record highs seen during summer 2008. The latest spike in the cost of fuel comes at the height of the Christmas shopping season. Fortunately for consumers, the median shopping trip length in America is only seven miles, according to the Bureau of Transportation Statistics. Depending on the vehicle, you will only use on average 0.34 gallon of fuel, at a total trip cost of just $1.03 for the Christmas shopping spree, according to the AAA Fuel Cost Calculator.
Crude oil hit a 2010 high and the highest settlement since October 2008 late in the week, settling at $89.19 a barrel Friday. A weakened U.S. dollar and a sharp rise in heating oil attracted investors, pushing crude oil to its highest price in 25 months. In addition, home sales and retail sales data released this week indicated sustained economic recovery was underway. Upbeat U.S. economic data typically serves as an indicator of increased energy demand by the world’s top energy user (the U.S.).
In its weekly report, the U.S. Energy Information Administration (EIA) announced crude oil stocks rose 1.1 million barrels to 358.7 million barrels, against forecasts for a 900,000 barrel decline. Gasoline stocks rose 561,000 barrels to 207.1 million barrels, against a forecast for a 400,000 barrel build.
The Weekend
“With the holiday shopping season in full swing, motorists are undoubtedly unnerved by the recent increase in pump prices,” said Tracy E. Noble, spokesperson for AAA Mid-Atlantic. “Increased gas prices, especially during the holiday season, cause motorists concern when digging deeper into their pockets to fill up their tanks, while at the same time begin to plan holiday travel and shopping expenses.”
The Week Ahead
As has been the case for most of the year, gas prices have followed the trend of crude oil. This will undoubtedly hold true for the remainder of 2010. Should crude oil continue its current advance to the $90 a barrel mark or above, gas prices will almost immediately follow suit.