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Gas prices trend upward

Gas prices have ticked over $2 a gallon this week, up 10 cents a gallon since the beginning of March, but the increase may just be a return to normal.

Gas prices typically climb this time of year as refineries switch from winter to summer blends, said Gregg Laskowski, a spokesman for AAA. The summer blend is more expensive to produce, and it forces refineries to slow or halt production, reducing gasoline supplies while they make the seasonal switch, Laskowski said.

"This is the time of year that we typically expect to see retail prices going up," Laskowski said.

The reduction in supply has been compounded by a steady rise in oil prices over the past three weeks, said Dave Mica, executive director of the Florida Petroleum Council.

Oil prices surged nearly 9 percent Thursday as investors focused on a weaker dollar, rising stock markets and the hope that the U.S. economy has finally bottomed out. A jump in crude prices can influence everything from how much it costs to fill up at the gas pump to the cost of making golf balls, shampoo and thousands of other petroleum-based products. On Thursday, benchmark crude for May delivery rose $4.25 to settle at $52.64 a barrel on the New York Mercantile Exchange.

"We're getting a bounce today, but I'm not sure if it will go much higher," said Peter Beutel, an oil analyst at Cameron Hanover. "The market has a lot of reasonably negative factors going into it."

A massive surplus of crude has kept prices low this year, and government reports said that U.S. storage houses are only getting more bloated. They're brimming with more oil than they've had in 16 years as manufacturers shutter factories and millions of laid-off workers stay home.

Mica said it's hard to predict where gas prices will be a month from now. Analysts are looking for any sign of a turnaround, and demand for petroleum products will rebound along with the rest of the economy, Mica said. No one knows when that will happen or whether a rebound will also mean a return to the record-high oil prices seen last year, he said.

Gas prices trend upward 04/02/09 [Last modified: Thursday, April 2, 2009 9:58pm]
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