Fuel prices rise as stock market rally raises expectation of greater consumer demand
The stock market’s rally of the past two weeks has raised the Dow Jones Index past 9,000; a milestone not seen since January. The rally has pushed crude oil into a rally of its own, as crude reached a closing price Friday on the New York Mercantile Exchange of $68.05 per barrel, a one-week increase of nearly $4.50 per barrel.
As a result, the nation’s decline in the average price of unleaded regular gasoline ended its string of 30 consecutive days on July 22. According to Retail Fuel Watch, a trade publication covering wholesale and retail gasoline pricing, “wholesale prices jumped more than a dozen cents in the last week, despite higher gasoline production, imports, and firmer “implied” demand.”
During the past week, the national average price of gasoline has increased by 3-cents per gallon; the average price in Florida declined by 1-cent; Georgia’s average price increased 5-cents per gallon, and Tennessee’s price increased by 3-cents per gallon. In the week ahead, retail prices could move slightly higher reflecting the increase in wholesale prices.
“Even though consumer demand remains flat, the stock market’s climb and some positive economic indicators (such as Thursday’s announcement of three consecutive months with gains in home sales) has apparently improved investors’ appetite for risk, and that’s a big part of the push now in commodities and specifically in crude oil,” said Gregg Laskoski, managing director, public relations, AAA Auto Club South.
Source: AAA Auto Club South