(LAS VEGAS KXNT)–Valley gasoline prices have spiked nearly 70 cents a gallon in the past month–increasing 18 cents in the past week alone, and don’t look for them to drop anytime soon.
Gas Buddy dot-com analyst Greg Leskoski tells KXNT the price hike here has been ‘extraordinary’ rivaling the 60-cent-plus a gallon increases in Detroit and Chicago.
Leskoski says there are several reasons for the sharp uptick: the switch from winter blends, the continued low refinery capacity on the west coast, and–something most consumers do not realize–the diminishing power of the U.S. dollar. Crude oil is bought and sold in U.S. dollars and the drop in the dollar. By comparison, the Euro is enjoying a 14-month high in comparison to the dollar.
“When the dollar diminishes, that means its going to take more American dollars to buy a barrel of oil, its going to take more U.S. dollars to refine it, and certainly its going to take more U.S. dollars for American consumers to buy the finished product–the gasoline at the pump”, says Leskoski.
He predicts that prices will continue to climb through most of the spring months, but will not plummet at the time, instead just level off. That is because by the time the price peaks, the summer driving season will be upon us, and prices normally do not fall during that time. Leskoski tells KXNT he doesnt see prices dropping until Labor Day.
He notes the Department of Energy releases refinery capacity figures each week, and the latest shows refineries are operating nationally at about 83%. However, west coast refineriies are now operating at about 79% which is actually up slightly from just 75% a week ago.