Thursday, November 4, 2010

Gasoline prices spike amid fire, supply & demand

An online fuel price watchdog says gasoline in Kentucky could climb to more than $3 a gallon in the coming days.

"A small fire at a Chicago area refinery and a key move by the Federal Reserve has resulted in a large increase in wholesale gasoline prices," reports

Wholesale gasoline prices have risen sharply in the last 72 hours, prompted by the fire in Illinois, a move by the Federal Reserve to inject $600 billion into the U.S. economy, driving down the value of the dollar, and yet another Department of Energy report showing healthy demand for petroleum amid shrinking supplies.

Gasoline in Marion rose to over $2.75 a gallon on Thursday.

Since the start of the week, gas stations have seen their wholesale cost rise as much as thirty five cents per gallon across several Midwest states, reports GasBuddy. As stations pass along their higher costs to consumers, it could lead to the highest fuel prices in 25 months.

"Unfortunately for motorists, we've seen quite a few events this week that have added significant pressure on gasoline prices to rise," says Patrick DeHaan, Senior Petroleum Analyst for GasBuddy. "Since oil prices have broken out of a well established range, I'm quite concerned we could continue to see not only oil prices rise, but gasoline and diesel prices as well."