Gas Prices Begin Climb Upward
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Published: January 8, 2009
Updated: January 8, 2009
Fear that the recent outbreak of violence in the Gaza Strip might affect the world’s oil supply and other “emotional factors” are behind the Tri-Cities’ first gas price increase in 24 weeks, according to AAA, which monitors gas prices nationwide.
In a statement released Wednesday, AAA East Tennessee said the average price for a gallon of gas in Bristol, Tenn., was $1.63, which is 12 cents more than last week’s average.
Kingsport, Tenn., saw its average gas price go up 19.4 cents over the past week while prices went up by 12 cents a gallon in Johnson City, Tenn.
The Israeli-Palestinian conflict in the Gaza Strip is similar to weather forecasts of hurricanes in the Gulf of Mexico that could disrupt the oil supply in that region, AAA East Tennessee spokeswoman Stephanie Milani said Wednesday.
“The anxiety [caused by these situations] pushes prices up at the wholesale level,” Milani said. She also said the price increases will be short-term in nature and not last for a very long period of time.
Oil and gas wholesalers are getting excited because the economic stimulus plan being proposed President-elect Barack Obama’s incoming administration might increase the amount of travel across the United States, she said. Those wholesalers also are raising their prices to take advantage of the possible increase in demand.
Price increases caused by this excitement, she said, also will be short-term. A sustained and long-term increase in demand for gas and oil is the only factor capable of causing a long-term increase in prices, Milani said.
Yet concerns about the gasoline supply can be dismissed easily based on a recent report issued by the Energy Information Administration, which put the country’s total crude oil reserve at 325.4 million barrels Jan. 2.
That is 6.7 million barrels higher than the country’s crude oil reserve on Dec. 26, and 39 million barrels higher than last year’s crude oil reserve. These high supply amounts have many industry experts forecasting even lower gas prices as demand for fuel continues to plummet.
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The Associated Press contributed to this report
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Reader Reactions
The prices in our region are catching up with the prices across the country. As a rule our cost of living has been lower than most other areas, but in turn our wages are much lower as well. The problem is now that we are catching up to the rest of the nation in cost of living but our wages are not going up. I recently had to drop my healthcare coverage because I just couldn’t pay for it and everything else as well. This is just a no win situation for our area….
And then they wonder why people are not buying and the economy is hurting…..heck far, we are too busy trying to compensate for higher water, power, groceries, medicine, health care, etc. It was taking me $55.00 a week to travel to work in a compact car. When gas went down, I was paying $23.00 per week. Power has doubled, water has tripled, hummmm I do not forsee any purchases anytime soon. No matter how bad I “think” I need them. SO sorry economy, I just can’t aford anything….maybe the goverment will have to bail us all out. That will surely bite them in the butt in the not so distant future.
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