G-khan
04-09-2010, 10:52 AM
Apr 9, 2010 8:20 am US/Central
Gas Prices Are Up, But Is That A Good Thing?
Some Predict $4 A Gallon; Analysts Warn Big Spike Could Slow Recovery
Don't look now, but a gradual rise in gasoline prices has suddenly turned into a gallop, with drivers facing a new round of sticker shock.
But as CBS 2's Derrick Blakley reports, the higher prices might actually be a good thing.
The growing pain at the pump kind of snuck up on many Chicago drivers, but now they're really feeling the bite.
"I just paid $3.54 for gas," said Michelle as she filled up at a Chicago gas station. "It's just outrageous."
Just a month ago, according to AAA Chicago, unleaded regular averaged $2.86 a gallon in the Chicago area.
Last week, it was $3.02.
Now, it's $3.08 and many predict it's heading higher; much higher.
Daniel Flynn, energy trader at PFG Best Research, was asked just how high the gas prices might go.
"That's the good question," said Flynn. "I've heard as high as $4 a gallon. Some analysts are saying $4."
What's going on? Reports that the economy is heating up – with growing consumer spending, higher retail sales and higher auto sales – has speculators betting on higher energy prices, too.
When the economy grows, so does demand for oil. But pushing energy prices too high could backfire.
"The last thing we want to see is higher energy prices at this time," said Flynn, because it can impact the rest of the economy negatively.
"I'm not happy with it," grumbled motorist Don Davis as he filled up. "I think it's gonna kill our recovery."
Davis fears a repeat of July 2008, when oil prices hit a record.
"It was $140 a barrel for oil and gas was $4 a gallon. I feel it's happening again. And it's not good news for the average person, that's for sure."
Bad news because money that's spent on higher energy costs is money diverted from other parts of the economy.
"Anytime you're spending more money on gas, it's gonna dip into your pockets a little," noted Brad, another driver topping off his tank.
Plenty of analysts believe with unemployment still over 10 percent, the economy's just too weak to sustain gas prices of $4 a gallon.
The consensus seems to be that prices will keep rising for awhile, until reality sets in, with prices coming back to earth, at least by July 4.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
http://cbs2chicago.com/consumer/gas.prices.rising.2.1620770.html
Gas Prices Are Up, But Is That A Good Thing?
Some Predict $4 A Gallon; Analysts Warn Big Spike Could Slow Recovery
Don't look now, but a gradual rise in gasoline prices has suddenly turned into a gallop, with drivers facing a new round of sticker shock.
But as CBS 2's Derrick Blakley reports, the higher prices might actually be a good thing.
The growing pain at the pump kind of snuck up on many Chicago drivers, but now they're really feeling the bite.
"I just paid $3.54 for gas," said Michelle as she filled up at a Chicago gas station. "It's just outrageous."
Just a month ago, according to AAA Chicago, unleaded regular averaged $2.86 a gallon in the Chicago area.
Last week, it was $3.02.
Now, it's $3.08 and many predict it's heading higher; much higher.
Daniel Flynn, energy trader at PFG Best Research, was asked just how high the gas prices might go.
"That's the good question," said Flynn. "I've heard as high as $4 a gallon. Some analysts are saying $4."
What's going on? Reports that the economy is heating up – with growing consumer spending, higher retail sales and higher auto sales – has speculators betting on higher energy prices, too.
When the economy grows, so does demand for oil. But pushing energy prices too high could backfire.
"The last thing we want to see is higher energy prices at this time," said Flynn, because it can impact the rest of the economy negatively.
"I'm not happy with it," grumbled motorist Don Davis as he filled up. "I think it's gonna kill our recovery."
Davis fears a repeat of July 2008, when oil prices hit a record.
"It was $140 a barrel for oil and gas was $4 a gallon. I feel it's happening again. And it's not good news for the average person, that's for sure."
Bad news because money that's spent on higher energy costs is money diverted from other parts of the economy.
"Anytime you're spending more money on gas, it's gonna dip into your pockets a little," noted Brad, another driver topping off his tank.
Plenty of analysts believe with unemployment still over 10 percent, the economy's just too weak to sustain gas prices of $4 a gallon.
The consensus seems to be that prices will keep rising for awhile, until reality sets in, with prices coming back to earth, at least by July 4.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
http://cbs2chicago.com/consumer/gas.prices.rising.2.1620770.html