Gas Prices Up 20 Cents Over Past Month

MINNEAPOLIS (WCCO) — As sure as the sun goes down, drivers get worried when the cost of gas goes up. And if you take a quick cruise across the Twin Cities, you’ll notice a steady climb in the price at the pump.

“When they’re high in this pickup truck it’s definitely killing us,” said driver Rekoe Howard.

“I mean I know there’s reasons for [the price hike], it’s just hard to survive every day,” said driver Heather Menonkariyil who carpools with her husband to work to save money.

As of Monday night, average price per gallon in Minnesota was $2.53 according to GasBuddy.com. It’s gone up twenty cents in the past month. One year earlier, the price was significantly lower at around $1.99.

Patrick DeHaan, Senior Petroleum Analyst with Gas Buddy, said in the past 10 years gas prices have only risen twice between Halloween and Thanksgiving.

“This really is a story about supply and demand. Supply is down, demand is up, that’s leading to higher gas prices,” DeHaan said.

Several factors are leading to the low supply according to DeHaan. He first pointed out that refineries are conducting maintenance which means less gas is being produced. For the Great Lakes region, he said that drop in gasoline production is typically supplemented by the Explorer Pipeline which connects the Gulf Coast refineries to Chicago.

“That pipeline about two weeks ago sprung a leak and was partially shut down, thus severing the artery that can be relied on as a backup,” he said.

And even though it’s been a few months since Hurricane Harvey, American drivers are feeling its aftermath.

“Those Harvey issues have caused gasoline inventories to drop in recent weeks to their lowest in three years,” he said.

Lastly, DeHaan said the price for a barrel of oil is at $57, $10 higher than in the summer.

“Usually by this time of year demand is down but as our data is telling us we are expecting a lot of people to be hitting the road, in fact perhaps record numbers of Americans hitting the road,” he added.

Even with the prices steadily rising, DeHaan said drivers don’t typically change their spending habits until the price tops $3.00.

“There’s a huge psychological impact because we drive by gas stations dozens of times a week and that $2.00 sign is ingrained, it’s burned into vision. Once that changes expect to see consumers shifting and start complaining more noticeably just because we’ve been at this $2.00 level for some time,” he said.

If the prices don’t change for the better, Howard might end up changing his ride. He said he drivers more than 100 miles per day due to his commute.

“I would definitely be downsizing and driving something smaller,” he said.

DeHaan said gas prices should continue climbing but that they likely won’t reach the $3.00 mark, however he said they won’t drop near $2.00 either anytime soon.

More from Jeff Wagner
Comments

One Comment

  1. Tim Neumann says:

    All this technology and oil companies still blame their lack of insight to schedule maintenance events at major refineries, or is it the pipeline leak, or is it the “winter” blend switch over, or is it (name your excuse here)

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