Why are gas prices on the rise?

August 10, 2012 2:35:15 PM PDT
Gas prices were up for the 12th straight day on Friday, leaving many drivers to wonder what is behind the spike.

The national average rose by a penny overnight to $3.67 a gallon. In Philadelphia, the average is $3.75, the highest since May 19th. AAA says that is 35 cents higher than the summer's low, just last month.

"Actually over the July 4th weekend, July 2nd to be exact. $3.40 a gallon was the lowest price that we had," said Jenny Robinson of AAA Mid-Atlantic.

So, what is driving the price hike? It has been described by some as a perfect storm.

Crude oil prices, which dipped in mid-summer because of sluggish worldwide demand, have been climbing since mid-July.

That move was watched by commodity speculators who, critics say, can accelerate and magnify upward swings if they think there is profit to be made.

Add to that the drought in the Midwest, which is devastating the corn crop. That is stoking fears that it could drive up the price of a corn-based ethanol gasoline additive.

Finally, there is concern over the weather now that we are in hurricane season.

"There is concern over the potential of a hurricane, whether that will hurt supply. Again, that feeds in speculation," said Robinson.

That uncertainty over supply along with steady demand means you're paying higher prices at the pump.

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