Why Gas Prices Are Heading Back Up

16-Jul-2012

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Mr. Gao co-found and became the CFO at Oxstones Capital Management. Mr. Gao currently serves as a director of Livedeal (Nasdaq: LIVE) and has served as a member of the Audit Committee of Livedeal since January 2012. Prior to establishing Oxstones Capital Management, from June 2008 until July 2010, Mr. Gao was a product owner at Procter and Gamble for its consolidation system and was responsible for the Procter and Gamble’s financial report consolidation process. From May 2007 to May 2008, Mr. Gao was a financial analyst at the Internal Revenue Service’s CFO division. Mr. Gao has a dual major Bachelor of Science degree in Computer Science and Economics from University of Maryland, and an M.B.A. specializing in finance and accounting from Georgetown University’s McDonough School of Business.







By Sharon Epperson

Gasoline futures settled in New York at the highest price in nearly two months, surging over 20 cents in July alone.

August RBOB (New York Mercantile Exchange: RBCV1) gasoline futures gained nearly 1.5 percent and closed above $2.85 a gallon on Monday, mirroring the climb in oil prices as the U.S. dollar weakened and tensions rose in the Middle East.

Some analysts suggest the slide toward a $3.00 retail gasoline may have permanently stalled. Retail gasoline prices often follow the trend in the futures market within a week or so, analysts say.

The national average for regular self-serve gasoline is $3.40 a gallon, up 2 cents from a week ago, according to AAA.

While a few areas in the Southeast have sub-$3.00 gas, along the East and West Coasts prices are well over $3.50 a gallon.

“I don’t see prices going lower. Retail demand has been picking up and supplies are low,” says Addison Armstrong, director of market research at Tradition Energy.

Refineries are also processing fuel at higher rates than is the norm for this time of year. “Refinery utilization is at 92.7 percent of capacity, which is much higher than normal,” Armstrong says. “Usually this time of year it’s about 89.5 percent.”

On average, retail gasoline prices are 10 cents lower than they were a month ago and 27 cents lower than this time last year. So there’s still a bit of relief left.

But judging from the price rise in the futures market, consumers will find the respite from high gas prices may not last much longer.

-By CNBC’s Sharon Epperson
Follow Sharon on Twitter: @sharon_epperson


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