Those amazingly low gas prices that soothed motorists for the past few months will soon be in the rearview mirror: Pump prices have jumped a dime or more in the past week and are expected to soar another 30 to 50 cents a gallon by April.
That would have California drivers paying around $3 a gallon, a far cry from today’s $2.53 statewide average mark but still well below the $3.60 price a year ago.
“California and the Pacific Northwest now have the highest wholesale prices in the nation, so some of the largest increases are expected in California,” said Allison Mac, an analyst with GasBuddy.com in Los Angeles, noting that wholesale prices — what a retailer pays for gas — in the Bay Area have jumped 24 cents since Monday.
But the most pain is being felt now in the upper Midwest, where the statewide average in Michigan soared from $2.09 on Tuesday to $2.23 on Wednesday. Bay City, Michigan, led all metropolitan areas in the nation with a 29-cent overnight hike.
What’s going on? A lot.
In other words, the party looks like it’s over. Prices have been so low — under $2 in nearly two dozen states — that they were bound to bounce higher.
“It’s still low by our standards,” said Pete Diaz of San Jose, who filled up on Sunday at an ARCO off Branham Lane in San Jose for less than $2.20 a gallon. “I’m not complaining — yet.”
The national average fell for 123 consecutive days before rising Jan. 25. But not everyone is predicting doom and gloom. There is still an overall worldwide glut of oil — supply is expected to exceed demand by 2 million barrels a day through summer. The U.S. is producing more oil than ever, and Saudi Arabia keeps pumping fuel at high levels.
Gas experts say oil’s “new normal” is $60 to $70 a barrel in the next few years. That’s just under half of recent years.
“There still is a lot of crude oil, and equally important world demand is still relatively weak,” said Tom Robinson of San Jose-based Coast Oil. “The price of crude oil, may go up because it went so low, but it is unlikely to go up significantly in the near term.”
Mercury News wire services contributed to this report. Contact Gary Richards at grichards@mercurynews.com or 408-920-5035.
GAS prices
Region Thursday Week ago
U.S. $2.15 $2.04
California $2.53 $2.44
Los Angeles $2.57 $2.46
Oakland 2.55 $2.46
San Francisco $2.68 $2.63
Santa Cruz $2.44 $2.37
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