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Gas prices continue to rise in Tampa Bay area

Remember two weeks ago when analysts predicted gas prices would stabilize after a 15 cent jump?

So much for their crystal ball.

Retail gas prices in Florida surpassed the national average this week, rising another 4 cents over the last week and 10 cents above the high two weeks ago.

The average price for a gallon of gas in the state reached $3.70 this week, just under a penny more than the national average. The Tampa Bay area average has also risen to $3.63.

And don't expect the price to drop anytime soon.

"Consumers can expect to see retail gas prices increase further this week, and it's likely this increase will continue into August," said Jessica Brady, a spokeswoman for AAA Auto Club South. "As hurricane season starts to heat up with various storms forming, it's likely oil prices will remain volatile on that factor alone."

A major factor driving the increase in oil prices is an increase in the cost of crude oil, which closed just shy of $100 a barrel last week.

A weakened U.S. dollar and European agreements to resolve the debt crisis and bail out Greece also contributed to the increase in oil prices. And the U.S. debt crisis could continue to weaken the dollar and drive oil prices even higher.

"If an agreement is not reached to raise the debt limit … that would weaken the dollar," Brady said. "If that's the case, we would most likely see oil prices rise."

The $3.70 a gallon state average is more than $1 higher than this time a year ago.

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.

Ned Bowman, executive director of the Florida Petroleum Marketers and Convenience Store Association, said volatility in the market would likely subside when uncertainty in the markets calms.

"Demand is still weak," Bowman said. "There's plenty of supply around. The biggest issue is to continue to get the speculators out of the market."

Ivan Penn can be reached at [email protected] or (727) 892-2332. Follow him on Twitter at www.twitter.com/Consumers_Edge and find the Consumer's Edge on Facebook.

Average gas price

Florida: $3.70

Tampa Bay: $3.63

Gas prices continue to rise in Tampa Bay area 07/25/11 [Last modified: Monday, July 25, 2011 9:01pm]
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