Gas prices have exceeded previous estimates meant for the peak of summer driving season following the recent, massive oil spill in the Gulf of Mexico.
Prices were expected to reach about $3 later this year when the summer driving season swings into full force, as MainStreet previously reported, but a gallon of gas could hit that mark much sooner than expected, according to the Rapid City Journal in South Dakota.
The cost of a gallon of gas increased as much as 7 cents a gallon in the past week in some areas on concerns that there could be a fuel shortage.
Some drivers in Madison and Milwaukee, Wisc., have already been paying $2.95 or more, according to Madison.com. Gas prices in Buffalo, N.Y., have already surpassed $3 a gallon, according to Buffalo Business First, suggesting that prices could be much higher than initially expected later this year.
But while the spill could cost the leaking oil rig owner BP (Stock Quote: BP) more than $3 billion, it’s not more than the company can afford, notes CNNMoney.com. And since there’s still currently a surplus of foreign crude oil available, U.S. gas prices could remain fairly stable, according to one oil analyst.
“I’m not brushing off the tragic elements of the accident, but it does not alter the fact that there is a huge surplus of available foreign crude, and a surplus of U.S. refining capability that should continue through summer,” says Tom Kloza of the Oil Price Information Service.
Kloza says he maintains his prediction that the peak price of a gallon of gasoline in the U.S. this summer will be $3.
Gas prices generally rise a bit before Memorial Day, according to Kloza, and the average price for a gallon of gasoline is currently up to $2.90 from $2.82 a month ago, according to AAA. But prices were only about $2.07 a full year ago, according to the AAA Daily Fuel Gauge Report.