Gasoline prices jumped as much as 15 cents a gallon over the last week in the Tampa Bay area, fueled largely by a growing global demand for oil.
The average price of a gallon of gas in the Tampa Bay area reached $3.58 this week, according to AAA Auto Club South. But the region remained 3 cents below the statewide average of $3.61 and 5 cents below the national retail figure of $3.63.
Dramatic increases like the uptick over the last week aren't expected to continue in the short-term, analysts say. Gas prices should stabilize as oil prices have shown signs of dropping, lower than expected job creation numbers means would-be workers will remain at home instead of driving, and vacationers are choosing local outings rather than long-distance trips.
"More people are staying at home or closer to home," said Jeff Lennox, a AAA spokesman. "We call it a staycation."
Retail gas prices dropped last month after the United States and other industrialized countries decided to tap government oil reserves because of the loss of oil from Libya.
Economists viewed the move as an indication that U.S. policymakers were running out of ideas to bolster the economy. Economists called the decision to tap reserves a "Band-Aid" solution that would not help long term.
"It was primarily just a psychological, emotional thing," said Adam Selvidge, member services director for the Florida Petroleum Marketers and Convenience Store Association.
At the current average of $3.58 a gallon in the Tampa Bay area, gas prices have returned to the level they were before the government's decision to tap the reserves.
Part of the problem was a lower-than-expected supply from the reserves. For example, last week just 890,000 barrels were released, though early projections for the week indicated that 2.5 million barrels would be released.
"This is all about supply and demand," said Rayola Dougher, senior economic adviser with the American Petroleum Institute in Washington, D.C.
The cost of oil has kept gas prices somewhat in check. The U.S. Department of Energy projected the average price of a barrel of oil this year would be $102, she said. But recently, oil prices have closed below $100, which analysts say is helping keep retail gas prices lower. Lennox, at AAA, says there are indications oil prices might drop again midweek.
The Department of Energy is expected to release its latest projections for oil prices at 1 p.m. today. The report includes projections about future retail gas prices.
Ivan Penn can be reached at firstname.lastname@example.org or (727) 892-2332. Follow him on Twitter at www.twitter.com/Consumers_edge and find the Consumer's Edge on Facebook.