Filed under: Bad news, Products and services, Consumer experience, Commodities, Oil, Recession
The cost of gasoline has once again risen to new record highs this weekend, as the cost for a gallon of gasoline jumped another 0.8 cents to a national average of $3.365 a gallon.
At current levels, consumers are spending 54 cents a gallon more for their gasoline they were this time last year, marking a 19% one year jump in gasoline prices. And for those of you that are hoping to get some relief from the current prices … don’t hold your breath. According to AAA, you should only be anticipating to see prices continue to move higher.
One of the main reasons why prices should continue to move to the upside is that we’re just now about to enter into the high demand summer driving months. Industry experts have already estimated that prices will continue to move higher, inching their way up to $3.60 a gallon, but there are plenty of analysts out there who are under the impression that we could see prices move even higher, possibly up toward $4 a gallon.
Another huge factor at play here is the weak U.S. dollar. As the dollar has been falling through most of 2008, this has led to rising oil and gasoline prices. If the dollar can begin to build some momentum, this will definitely help ease prices, but it is unlikely to see too much of a rebound over the next few months as recession fears continue to persist on Wall Street, fueled by a recent jump in unemployment, record high foreclosure rates, and most recently a couple of disappointing earnings announcements to kick off the current earnings season.
One thing that will help ease prices would be if Americans demand less gasoline this summer. Will that happen? It is tough to tell at this point if the high prices will impact summer travel plans. Regardless, we should definitely be bracing ourselves for at least another couple of months of rising gasoline prices.
How will the current gas prices effect your summer plans? Will you plan to cut back on your consumption or will you plan to go ahead with your plans as normal?
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.
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