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Recent fuel spike causes varied


Gas prices have spiked in the first weeks of June, and according to AAA spokesman Stephanie Milani, the reasons for the spike are varied.

“Right now, we’re looking at the area average at $2.36,” Milani said Monday, June 8.

“Last Monday, it was $2.31 … last month, it was right at $2. We have definitely seen an increase in the price over the last few weeks,” she added.

However, Milani said the prices now are well and below the gas price average from this same time last year.

“This day last year, prices were at $3.83. We’re definitely right about at $1.50 less,” Milani said.


One reason for the spike, Milani said, were numbers recently released by China showing its oil manufacturing was up.

“It had increased in the month of May, so that made oil traders kind of optimistic about the global economy,” Milani said.

Although OPEC made significant oil production cuts in late 2008, some experts say those cuts are just now affecting prices, although the U.S. still has “massive inventories of oil and gasoline,” Milani said.

According to Milani, OPEC hoped to average $70 to $80 per barrel of crude oil by year’s end. As of Tuesday, June 9, crude oil prices per barrel were brushing $70.

Another reason was GM’s declaration of bankruptcy in early June.

“People were hopeful that would kind of bolster the health of that company,” Milani said.

Of course, June also marks the beginning of summer travel season, when prices traditionally rise.

“We did see the changeover in past weeks to summer blends of fuel … and historically, we’ve seen a spike in prices during that changeover,” Milani said.

In addition, AAA reports lead experts to believe more Americans will be traveling by car this summer than in previous summers, largely because prices are “significantly lower than last year,” Milani said.

“And there were a lot of travel deals to be had,” she added.

Because so many factors play into gas prices, Milani said, “We really don’t know where gas prices are going to go.”

 

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