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LC: Gas prices in Ohio soar 19 cents, could creep higher
 
Consumers are paying more at the gas pump, and prices could go a touch higher, oil and gasoline industry analysts say.


The latest survey from auto club AAA, the Oil Price Information Service and Wright Express shows Ohio's average price for regular-grade gasoline has jumped 19 cents from last Monday, to $2.84 a gallon.

A year ago, Ohioans were filling up for less, paying an average $2.45 for regular.

The average price for a gallon of regular gasoline nationwide was $2.80 Sunday, up 32.6 cents from the same time last year and its highest level since May, auto club AAA says.

Crude oil prices have had similar increases and are up 4.2 percent for the year.

Whether and how much gasoline prices will continue to rise may depend more on investors than on market fundamentals, analysts say. That's because prices are largely being driven by:

• The weak dollar. It's been falling on expectations that the Federal Reserve will put more money into the economy.

Crude oil, which is priced in dollars, becomes cheaper for buyers using stronger currencies. That lifts oil prices, which trickle down to higher gasoline prices.

What's more, early October is the beginning of a new quarter, and "a lot of (investor) money is being put to work," says Tom Kloza, analyst with the Oil Price Information Service.

Crude oil closed Friday at $82.66, up 11 percent from mid-September. Heating oil futures are up 7 percent in the same timeframe.

• Refining capacity. The USA's gasoline refineries are operating at a lower capacity as many undertake routine maintenance. As of the end of last month, the nation's refineries were operating at 83.1 percent capacity, the lowest rate of use since the end of March, Kloza says.

Higher gasoline and heating oil prices at this time of the year run contrary to normal seasonal patterns, says Darin Newsom of analysis firm Telvent DTN. Most often, both trend lower this time of year.

"This year is just one of those anomalies," Newsom says.

He expects wholesale gasoline prices -- as well as heating oil futures -- to continue to rise early this week, then level off. Kloza also says oil is probably near its peak for the year.

Most analysts expect gasoline prices to be "essentially static" for the rest of the year, AAA analyst Chris Plaushin wrote in a report last week.

That's because overall demand remains weak. The Energy Information Administration reported last week that demand for gasoline for the week ended Oct. 1 was 9 million barrels a day vs. 9.3 million in the same period last year.

Meanwhile, gasoline stocks dipped to 220 million barrels for the week ended Oct. 1, vs. a five-year average of 200 million, Newsom says.
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