Weakened dollar drives gas prices up

Posted: Sunday, October 24, 2010 5:00 am | Updated: 4:08 pm, Fri Oct 22, 2010.

Mike Leiby - The Independent

WHITE MOUNTAINS — Gasoline supplies are high but demand is not. So why have at-the-pump prices risen lately?

It looks like it may again be a case of futures market speculators driving it up artificially.

The end of the summer driving season after the Labor Day weekend historically marks a point when the cost of a gallon of gasoline declines, but this year it has risen nearly a dime nationwide.

It seems that following recent signs of improvement in the stock market, speculators may be betting on people driving more as the economy improves and are buying futures, thus driving up at-the-pump prices for consumers.

According to AAA Arizona’s Communications and Public Affairs Director Linda Gorman, the recent price surge is in large part due to the weakened dollar as well as optimism over the global economy, but also partly from retail fuel prices moving higher in an attempt to catch up to crude gains.

“While a sustained crude price north of $80 per barrel has tugged the price of retail fuel up the last two weeks, it is important to note that there are also several factors working in favor of pump price stability,” Gorman said.

“Healthy supplies, sluggish demand and the switch to our winter blend of fuel, which is less expensive to produce, should curb any significant price movements at the pump looking ahead, barring unforeseen circumstances.”

A survey of at-the-pump prices for regular unleaded gasoline at 11 local stations shows that the average price for the commodity in the Show Low/Pinetop-Lakeside area is currently $2.80 with Diesel running a bit higher at about $3.09 per gallon.

The nationwide cost of a gallon of regular unleaded is about $2.82. The average price in Arizona is $2.72.

Flagstaff motorists pay the highest per gallon price for regular unleaded at about $2.92 and Tucson drivers are paying the least at $2.60.

AAA Arizona says motorists can visit AAAaz.com/news/fuelnews.htm for fuel price information and saving tips or www.AAA.com/fuelfinder to locate the station with the cheapest gas in their neighborhood.

Reach the reporter at mleiby@wmicentral.com