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Gas prices spiking again

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By Jessica Heffner, Staff Writer Updated 5:39 PM Tuesday, June 2, 2009

It may be time to fill ’er up as gas prices across the area are spiking more than 20 cents for a regular gallon of gas.

According to cincygasprices.com, several stations across Butler County are posting prices at $2.75 per gallon, with the average price at $2.55. The spike comes as a shock to consumers since the Energy Information Administration predicted the average price for regular gasoline would be $2.21 per gallon this summer.

“We thought we left that all behind last summer,” said James Brock, a professor of economics at Miami University who specializes in the petroleum industry. “But consumers should expect to be surprised, there are good surprises and bad and right now this is a bad surprise.”

Last year at this time, the average price per gallon was $3.94 for regular gasoline in the region.

Several factors can be attributed to the spike, including the Organization of the Petroleum Exporting Countries nations cutting back on how much oil they release and fewer oil companies in competition over supplies, Brock said. As a result, the price of crude oil gained 78 cents Tuesday, June 2, hitting $68.76 per barrel, the highest close since November.

However, while prices soar, global crude oil demand is down nearly 3 million barrels a day, making for the largest spare capacity overhang in 21 years at 6.5 million barrels per day, according to government statistics.

Such an oversupply coupled with a recession should be making for lower prices, Brock said. But because oil companies are not releasing their entire supplies into the market, the price stays high.

“It doesn’t have to be this way. We have anti-trust laws we could dust off and use and maybe this will be the catalyst to use our anti-trust laws again.”

Contact this reporter at (513) 705-2843 or jheffner@coxohio.com.

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