Record gas prices for February

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Lincoln,NE-Gas prices locally are already at a record high for the month of February and will continue to rise through spring.

Story and photos by Kayla Bremer, News Net Nebraska

Gas prices have gone up for the 22nd day in a row on Wednesday, making the current price of gasoline the most expensive on record for the month of February.

The U.S. Energy Information Administration released a report on Tuesday showing that the national average for a gallon of regular gasoline is now around $3.68. This means that prices at the pump are 13 cents higher than last week and 30 cents higher than the same time last month.

Speculators believe that prices could climb as high as $4.25 by late April and may reach the $5.00 mark by Memorial Day. Recent worsening tensions in the Middle Eastern countries, mainly Iran have increased the price of crude oil. Iran has reduced shipments to both Europe and the U.S. after completely shutting off shipments to France and Britain last week. Iran reducing their shipments does leave the U.S. with some concern, but shouldn’t cause prices to jump to $5.00 says Dr. Eric Thompson, a UNL Economics professor and Director of The Bureau of Business Research.

“There is some concern that political or military factors are playing a role, in particular confrontation with Iran, which of course is a major oil producer and has the potential to block the flow out of the Middle East,” said Thompson. “Unless the risk of those events or concerns get to be really heightened, more so than now, then my guess is that the affect on oil prices won’t be that substantial. Risks from Iran have actually been built into oil prices for years.”

Thompson said he thinks gas prices will most likely stay around or closer to the $4 range.

“The global economic growth is just not going to be strong enough over the next few months to put a lot of upward pressure on oil prices and therefore gasoline prices,” said Thompson.

Prices are expected to stay in the $3.50-$4.00 range in Lincoln.

More locally, the average price in Nebraska for a regular gallon of gasoline is $3.68. Lincoln has recently seen prices almost ten cents higher. Thompson says the reason for higher prices in Lincoln is because of the local tradition for smaller gasoline stations.

“Like in any business when you’re smaller you can’t spread your costs, you’re a little more expensive,” said Thompson. “That’s great because in Lincoln you don’t have to drive as far from where you live to get to a gas station which saves you time and money.”

Evidence has shown that Americans are driving less and are buying more fuel efficient cars because of the rise in prices. Gasoline demand fell 6.7 percent compared to the same time last year. The drop in demand resulted in a surplus of 4.2 million barrels in crude oil inventories last week. This led to a 3 percent drop Monday and Tuesday in oil which could give consumers a break at pump later this week, but experts believe gas will continue to rise in the next several weeks.

So what exactly goes into deciding the price of gas? Thompson said the underlying factor is the price of a barrel of oil. The United States uses West Texas Intermediate to price a barrel of oil that is produced here on American soil. The price rose 52 cents this last week, setting the price at $107.07 a barrel. One of the reasons for this is the closure of refineries in the U.S. as well as the recent fire at BP’s Cherry Point facility in the Pacific Northwest. California and its cities are seeing the results of this by having the highest gas prices in country which already passed $4.25 a gallon. California does have higher gas prices than the rest of the country normally due to the special blend of gas mandated by the state to help control pollution. The lowest gas prices in the country are currently in Fort Collins, CO where people are seeing as low as $3.11 at the pump.

As the threat for higher gas prices continues, Thompson said people need to get used to the idea.

“Remember when gas was $2.00 a gallon? Those days are gone,” said Thompson. “This is where gas is now. My feeling is we are in a new regime of $3-$4 sometimes $4.50 gas, so this is our new range for gas prices.”

Using Gasbuddy.com, below are the ten lowest by state and ten lowest by city for gas prices.

10 Lowest By State:
1. Wyoming $3.116
2. Colorado $3.159
3. Montana $3.242
4. Utah $3.265
5. Idaho $3.347
6. Oklahoma $3.446
7. New Mexico $3.449
8. Missouri $3.520
9. South Carolina $3.542
10. Arkansas $3.548

10 Lowest by City:
1. Fort Collins, CO $3.119
2. Colorado Springs, CO $3.132
3. Denver, CO $3.139
4. Billings, MT $3.238
5. Salt Lake City, UT $3.239
6. Ogden, UT $3.255
7. Provo, UT $3.285
8. Albuquerque, NM $3.364
9. Boise, ID $3.384
10. Tulsa, OK $3.401