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What you need to know for 01/23/2018

Mideast tension to blame for rising gas prices

Mideast tension to blame for rising gas prices

Gas prices will be higher than they have been this Labor Day weekend, but it’s not because retailers
Mideast tension to blame for rising gas prices
A customer of Cumberland Farms in Fonda gets ready to pump a tankful of gas at a price of $3.75 a gallon.
Photographer: Marc Schultz

Gas prices will be higher than they have been this Labor Day weekend, but it’s not because retailers are looking to take advantage of your travel plans.

If it weren’t for heightened unrest in Syria, gas prices probably would have continued their downward slide into the weekend, said AAA Northway spokesman Eric Stigberg. But with the possibility of a U.S. attack on Syria looming this week, prices at the pump have begun a noticeable uptick.

“They were dropping and dropping, probably since the end of July, and then yesterday was the first uptick we’ve seen in several weeks,” said Stigberg on Thursday. “Anytime there are tensions in the Middle East that could potentially threaten oil supplies, there is an upward pressure on gas prices as well. It’s more perception than anything. Nothing has happened in Syria yet. But speculators in the market say, uh oh, there’s a potential for cutting off supplies so let’s buy oil, which drives the price up. If something more than a threat — something real — were to happen and we see actual supply disruptions, prices would skyrocket.”

There is some good news for those who take a big-picture approach to their travel budget. The national average for gas was $3.80 a gallon one year ago. On Thursday, it was 24 cents lower at $3.56. The picture echoes higher in the Capital Region. Last year, gas prices averaged $3.90 a gallon heading into Labor Day weekend. On Thursday, they were $3.74.

Gas prices usually lag behind any change in the price of oil. So while oil prices climbed about 5 percent this month because of escalating violence in Egypt and unrest in Syria, gas prices are only just now beginning to catch up.

The national average price for a gallon of gasoline jumped 1.8 cents from Wednesday to Thursday — the biggest overnight jump in six weeks, according to AAA. The price for a gallon of gasoline jumped 1.7 cents in the Capital Region during this time, according to AAA’s Daily Fuel Gauge Report.

Stigberg couldn’t say whether there’s any chance of prices going down toward the end of the holiday weekend.

“It all depends on how quickly this simmers down,” he said. “Even just today, we heard that things might not get as volatile as we first thought in Syria. They’re kind of backing down on some of the talks of air strikes and, what do you know, the price of oil dropped today. It’s so reactionary to what’s being said in the world.”

Stewart’s Shop spokeswoman Maria D’Amelia said that the convenience store chain has tried to keep the price of gas down for its customers even as the cost of crude oil has jumped.

“Just this week alone, our prices for the customer have only increased about 2 cents,” she said. “We’ve been watching all of the events play out very closely, and we’re always aiming to be fair and consistent with our pricing and keep our customers in mind.”

Although it’s a commonly held belief, Stigberg added, the price of gas doesn’t automatically increase around big travel holidays, like Labor Day weekend.

“The price of gas doesn’t by itself just move up because it’s a holiday,” he said. “It’s totally market driven at the macro-level. We’re talking about geo-political events, weather events like hurricanes, or a sudden drop in supplies. There’s no guy sitting behind the register jacking the price up because he feels like it.”

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