Economy

Economic uncertainty pumps up gas prices

Gas prices, predicted to dip as low as $3.25 a gallon in South Carolina by summer’s end, have risen 13 cents a gallon in the past week to $3.43, according to AAA.

That’s exactly where prices stood a month ago.

And relief won’t come anytime soon, experts say. Blame uncertainty, currency fluctuations and speculators, they say.

“The standoff that we’re having over the (national) debt (limit) is getting some people nervous,” said Tom Crosby, spokesman for AAA Carolinas.

That spending debate, which has produced only heated rhetoric thus far, has weakened the dollar at the same time that a bailout of Greece’s debt problems raised the value of the euro. “Whenever that occurs, people with euros invest in oil futures,” Crosby said, driving up the price of oil and prices at the pump in the United States.

In South Carolina, gas prices peaked about $3.75 a gallon in mid-May but then started dropping rapidly, falling to $3.31 a week ago. Nationally, prices reached nearly $4 a gallon before falling. Currently, they stand at $3.65.

An unexpected drop in U.S. crude supplies pushed oil prices up 62 cents a barrel Wednesday to $98.05. Oil jumped after the Energy Information Administration said the nation’s crude-oil supplies fell by 3.1 million barrels last week, a million barrels more than analysts had forecast.

More government-stimulus spending could push prices even higher, some fear.

Federal Reserve Chairman Ben Bernanke hinted at more stimulus Wednesday, saying the central bank could consider more measures to boost the flagging economy. However, more stimulus measures could weaken the dollar even more, driving up energy costs.

Read the full story at TheState.com

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