AAA Says the Recent Winter Storms are Responsible for the Increase in Gas Prices

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AAA Says the Recent Winter Storms are Responsible for the Increase in Gas Prices
AAA Says the Recent Winter Storms are Responsible for the Increase in Gas Prices

AAA Says the Recent Winter Storms are Responsible for the Increase in Gas Prices

It is not just ForexMinute that believes that the recent winter storms are responsible for the rise in gas prices as even AAA or American Automobile Association too thinks so. In its ‘Auto Club’s weekly fuel price brief’ it says that apart from flight cancellations and hazardous roads over the past month and a half, winter storms can also be attributed to higher gas prices.

In its report the AAA says that the national average for a gallon of regular unleaded gasoline is $3.41 i.e. 6 cents more than last week. Similarly, there was increase in Georgia’s average of $3.28 which gained 7 cents. Several other states too saw increase e.g. Tennessee’s average of $3.19 rose 2 cents from last week.

According to Mark Jenkins, spokesman for AAA, “Despite the recent jump in pump prices, Southeast gas prices are more than 40 cents less than they were this time last year.” However, he also believes that even with the severe winter and seasonal refinery maintenance, it doesn’t look like gas prices will spike to year-ago levels.

Oil Futures Rose on Monday

Amidst the concern over global supply that pushed Brent, the international benchmark, to a new 2014 settle high, oil futures were higher on Monday. On the day’s trade, light, sweet crude for April delivery settled up 62 cents, or 0.6%, at $102.82 a barrel on the New York Mercantile Exchange.

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A similar trend was seen on Brent crude on the ICE futures exchange wherein it strengthened its position gaining 79 cents, or 0.7%, to $110.64 a barrel which in fact is its highest settlement price that it reached on Dec. 31 last year. According to investors, the major reason behind the increase in Brent crude was trouble in Libya.

The reports say that Libyan oil output fell to 230,000 barrels a day on Sunday which is a fall of more than 50% as it was close to 570,000 barrels a day in early January this year. The country has long been facing trouble due to labor unrest and the new episode tells that the state-owned National Oil Corp. is facing the same problem.

Libya is not the only oil producer facing trouble; some other countries too are facing unrest that includes Nigeria, Venezuela and South Sudan. Venezuela is in deep domestic crisis due to popular protests and that may affect oil production.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com