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Demand Picks Up – So Do Prices

Prices at the pump have risen a quarter to $2.75/gal in Metro Detroit in the past month.

The bad news: they will be going higher. The good news: probably not to more than $3.

The warm weather is one reason for the spike, but experts say increased demand around the globe, confidence in oil futures and the changeover to the summer blend are all having an impact.

As Tom Kloza of OPIS puts it,

…renewed confidence will drive the price of gas up between now and May, when demand typically goes up and investors “overreact” to the possibility that there will be a fuel shortage in the future.

“Last year, we were at the absolute bottom of the malaise,” he said. “People were selling their commodities contracts and the markets got much smaller.”

Whatever the cause, the rising price of gasoline is one big pain for motorists and gas station owners as well.

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