Brace yourself for higher prices
As if everything else happening in different parts of the world isn't scary enough, i.e. the California fires, the conflict overseas, the devastating flooding, the list goes on, now we have record-high oil prices and signs proclaiming $3-plus a gallon gasoline staring us in the face, popping up all across the state again the last few days.
According to AAA's daily fuel gauge report, the average statewide price ranged from $2.95 on Oct. 1, to a low of $2.83 on Oct. 16, before rebounding to $2.93 to end the month. Retail outlets in several communities across the state were selling gasoline for $3 or higher. Crude oil, which traded near $81 a barrel on Oct. 1, closed the month at a record high of $94.53 and yesterday (Tuesday) hit a new record of $97 a barrel. One year ago oil was trading near $58 a barrel while gasoline was selling in North Dakota for an average of $2.25.
On October 30, the average cost of diesel fuel hit a record high of $3.36 in North Dakota. That record was recently exceeded as the statewide average now averages $3.37.
So what's up with these rising gasoline prices?
The last week the prices have remained steady in the $2.79 to $2.89 range. Last night on my way home from the office the signs still read $2.89. An hour later on the local early news the big story was that prices had jumped to the $3.09 mark for regular unleaded, which they were up to also at West Fargo locations on my way into work this morning.
Oil prices are expected to remain volatile for the foreseeable future. Many analysts continue to predict oil prices of $100 or higher. At that level, gasoline prices would likely exceed record highs set in May.
For your information, record high averages for self-serve unleaded were: United States: $3.22 (5/24/07); North Dakota: $3.37 (5/24/07); Bismarck: $3.34 (5/22/07); Fargo: $3.35 (5/22/07); and Grand Forks: $3.35 (5/24/07).
Talking with a local business owner, the good news (if it's any consolation at all) is that the prices should have gone up last Friday and stations were selling their gas below cost all weekend because of the competition.
The wholesale price went up again yesterday, so prices on the gas signs had to follow suit.
My same contact, said he's expecting gasoline prices at the pump to go up to $4 a gallon at some time in the next four months and predicts they are not likely to drop anytime soon if we hit the $100 a barrel price.
In his words, the problem is the international market - the competition for those barrels of oil out there is putting too much pressure on the supply that is available.
Ultimately, this situation is not good for anybody, from restaurants to hotels to other retail businesses that are going to feel the lack of customers because of transportation issues related to the skyrocketing gasoline prices.
Also taking a big hit will be those individuals who still heat their homes with fuel oil. The cost to keep their homes warm is sure to become more than the average household pocket can bear. When you're purchasing 100 to 400 gallons at a time, you're talking a huge chunk of change with those prices at the $3.07 and $3.37 level for varying grades.
For additional fuel price information, visit www.AAAfuelgaugereport.com.