The brakes are on, slowing the downhill ride of gas prices we have been enjoying the past several months.
Unfortunately, the dropping cost of wholesale gasoline, also know as RBOB, prompted production cuts at oil refineries.
“A few refineries have already announced production cuts as it isn’t worth it for them to produce RBOB currently,” said Jeff Pelton, GasBuddy.com senior petroleum analyst. “That, coupled with upcoming maintenance and the looming specter of summer (reformulated) gas all bode poorly for gas prices to get any better than they currently are.”
The average price was $ 1.60 Monday for a gallon of regular, according to GasBuddy.com.
If there is a silver lining for drivers, it’s that prices should remain stable, Pelton said. But any expectations that gas prices could hit the $ 1.30 mark or lower will not come to reality.
Here’s why:
Wholesale gas finished Friday up 9.25 cents to $ 1. To put it in perspective, the price of wholesale gas opened at 87 cents on the commodities markets in New York on Wednesday, Pelton said. By the end of the day it was up a nickel to 92 cents.
Crude crude is up $ 3.22 or just over 11 percent for the day to just under $ 30 a barrel. Look at the chart on the NASDAQ website to see how the price of crude oil shot up between Thursday and Friday.
What this means for the coming week is that pump prices should be in a holding pattern while retailers wait to see what happens in the commodities markets, Pelton said.
Some of the gas stations with prices that rank among GasBuddy’s lowest of the low are where drivers will likely see increases first, since they’re likely to see tanker trucks of gas arrive with a higher price, he said.
“I am thinking many will hold their retail prices and see what the market does,” he said.
Larry Higgs may be reached at lhiggs@njadvancemedia.com. Follow him on Twitter @commutinglarry. Find NJ.com on Facebook.
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