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Gas prices spiking again
Fed's move a likely culprit
Updated: Monday, 08 Nov 2010, 11:02 AM EST
Published : Monday, 08 Nov 2010, 10:33 AM EST
GRAND RAPIDS, Mich. (WOOD) - Gas prices spiked 28 cents per gallon within the last week, and analysts believe the culprit is rising oil prices driven by the Federal Reserve's move to pump billions of dollars into the economy by buying back US Treasury bonds.
At this time last year, gas prices were 46 cents per gallon lower than the average $3.09 in the Grand Rapids area.
The Fed's move makes the dollar weaker, which gives foreign currencies more oil-buying power. That makes traders buy up oil futures, and that increases the pump price.
Patrick DeHaan of GasBuddy.com is not sure if prices are close to peaking.
"A lot of time it's Tuesday or Thursday when prices go up the most," DeHaan told 24 Hour News 8. "We've noticed watching, too, the Dow Jones index, when it rallies, prices tend to go up the next day or so."
Gas prices are also driven by location. Prices tend to be higher in more affluent sections of town. If you monitor prices on the web, gas stations with lower prices tend to be all over the map, but the higher prices seem to stick to a target location.
"We've really know stations do attempt to have the lowest price so they get noticed. In the last couple of weeks there are some stations in Kentwood that have specifically lowered their prices so they can get on that low price list," he said.
Typically Speedway is the first to change prices, and tends to change between 9 - 10 a.m.
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