Motorists filling up this week in Northeast Mississippi have been hit hard in the wallet, with prices at the pump rising 20 cents or more.
Prices also are rising nationwide. Retail gas prices on Friday rose 2 cents to a new national average of $2.63 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Prices have gone up nearly 10 cents from a month ago.
That puts prices around their summer peak of about $2.69 a gallon in mid- to late-June.
On Friday, gas stations around Tupelo were at $2.58.
A week earlier, most stations in Tupelo were selling gas at about $2.37. At the start of the month, the lowest price in Northeast Mississippi could be found in Fulton, at $2.09.
So why the run-up at the pump?
Oil prices have much to do with it. As oil prices rise, gas prices tend to rise as well.
And oil prices have jumped more than 25 percent in less than a month. On Friday, crude oil closed at $80.50 a barrel on the New York Mercantile Exchange, more than $10 higher than at the start of the month.
But the oil price increase isn’t being caused by increased demand. The global economy is still in a recession. The weakening value of the dollar is the primary driver behind the oil price increases. Oil is traded in dollars, which allows investors holding stronger currencies to buy more as the dollar falls.
And on Friday, the dollar hit a new low for the year. Investors tend to buy commodities like oil as a hedge against inflation and a weaker dollar. That buying pushes oil prices higher.
But even if the dollar is weak, energy demand is still weak, too, and oil supplies remain abundant.
Peter Beutel, an analyst at Cameron Hanover, said “at some point, the bubble has to burst.”
Consumers may be feeling a little more pain at the pump, but prices are about 18 cents lower than a year ago.
And about a year ago, oil and gas prices began falling. By the end of the year, the national average was about $1.61. In Mississippi, prices averaged about $1.54 a gallon.