Gas Prices Appear Poised To Rebound

Remember when?

A tankful of gasoline to get you to grandma's house for Thanksgiving is likely going to cost more. Gas prices appear poised to jump again.

Motorists have gotten a break at the pump over the last few weeks as economic uncertainly pushed crude oil prices below $80 a barrel at one point. But despite those worries – and new concerns about Italy's solvency - oil prices have come roaring back.

Crude oil was trading around $97 a barrel at midday today on the New York Mercantile Exchange. Gasoline prices have begun rising this week.

The national average price of self-serve regular today is $3.430 a gallon, up two cents from Tuesday, according to the AAA Fuel Gauge Survey. If history is any guide, it will move higher over the next couple of weeks, assuming oil prices continue to hold their lofty positions.

Supplies are down

While the price of crude oil is rising, U.S. supplies of petroleum are being drawn down. The U.S. Energy Information Administration (EIA) reported today that U.S. crude oil stockpiles fell by 1.4 million barrels in the last week. That's more than seven percent low U.S. supply levels a year ago.

With falling supplies, refiners may be forced to purchase more of the increasingly expensive oil in the weeks ahead, passing the increase along in the form of higher prices.

Not surprisingly, consumers are doing their best to cut back on gasoline purchases. The EIA reports U.S. demand for gasoline was down 5.6 percent compared to a year ago. Despite that, U.S. gasoline stockpiles fell by 2.1 millions barrels.

If gasoline prices seem low at the moment, consider that one year ago motorists were paying what now seems like the bargain price of $2.85 per gallon. Prices peaked in early May at just under $4 a gallon.