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Gas Prices Hit Record Highs

Gas prices across the nation have risen to their highest prices since October 2012, according to new reports from the Energy Informational Association. The USA Today reports:

“The price of a gallon of regular unleaded stands at $3.611 in the survey released today, up 7.3 cents a gallon from a week ago and 3.6 cents from the same week last year…Gas prices have steadily climbed since they hit a low of $3.254 for the week of Dec. 17. They haven’t hit $3.60 a gallon since Oct. 22, the EIA pricing history shows.

Prices typically climb as the nation comes into the spring driving season, but as the weather attests, we’re still a long ways off.”

However, the LA Times seems to suggest that this recent rise in pricing has more to do with speculating on the energy markets than consumer driving patterns. As they claimed this morning:

“Hedge funds, commodity pools and other high-roller investors have thrown close to $12.5 billion into a collective bet that gasoline prices will rise, and some analysts say it’s one reason why gasoline prices are at a record for this date in California and nationally.

The details were contained in the Commodity Futures Trading Commission report released Friday, showing that betting on higher gasoline prices was closing in on the highest level ever of $13 billion, set last March.

‘There has never been this much money bet on higher gasoline prices this early in the year,’ said Tom Kloza, chief oil analyst for the Oil Price Information Service.”

This pattern would fit with some of the most recent data analysis we at Pumps have been personally involved with. Every month we compare the forward price curve to the previous several months, thereby plotting the change in the futures markets over time. This most recent data showed that the futures market predicted prices for crude oil to exceed the highs of last spring.

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