European crises, Fed news helps fuel rise in state, local gas prices

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European crises, Fed news helps fuel rise in state, local gas prices

By KRISTY EPPLEY RUPON
krupon@thestate.com
Published Friday, July 15, 2011   |  467 Words  |  

The average gas price, predicted to dip as low as $3.25 a gallon in South Carolina by summer's end, have risen 12 cents a gallon in the past week to $3.46, according to AAA.

That's close to where prices stood a month ago.

Prices in Beaufort County were higher for the week, too.

Per-gallon prices for regular gasoline reported to AAA between Tuesday and Friday averaged $3.47 to $3.48 in Beaufort and Port Royal. Prices were higher in Bluffton and Hilton Head Island, ranging from $3.49 to $3.59 a gallon.

"The standoff that we're having over the (national) debt (limit) is getting some people nervous," said Tom Crosby, spokesman for AAA Carolinas.

That spending debate has weakened the dollar just as a bailout of Greece's debt problems raised the value of the euro. As a result, oil and gas prices in the United States have climbed, Crosby said.

In South Carolina, gas prices peaked about $3.75 a gallon in mid-May but then started dropping rapidly, falling to $3.31 at the start of the month. Nationally, prices reached nearly $4 a gallon before falling. Currently, they stand at $3.66.

Crude oil futures fell Friday morning after an unexpected drop in U.S. crude supplies pushed oil prices up 62 cents a barrel Wednesday to $98.05.

The oil futures dropped after Federal Reserve chairman Ben Bernanke doused expectations for a near-term continuation of a U.S. economic stimulus program, according to the Dow Jones Newswire.

Bernanke had hinted at more stimulus Wednesday, saying the central bank could consider more measures to boost the flagging economy. However, more stimulus measures could weaken the dollar even more, driving up energy costs.

"We are not prepared at this point to take further action," Bernanke told a Senate committee Thursday.

The news sent crude futures to a low of $94.53 a barrel Friday morning. Light, sweet crude oil futures settled down $2.36, or 2.4 per cent, at $95.69 a barrel.

Oil jumped after the Energy Information Administration said U.S. crude-oil supplies fell by 3.1 million barrels last week, more than analysts had forecast.

The Obama administration gave the green light two weeks ago to release 30 million barrels of oil from the country's Strategic Petroleum Reserve. That could moderate gas price increases, AAA's Crosby said. Another 30 million barrels are set to be released internationally.

"The oil release has yet to make a difference," Crosby said, adding it takes a couple of weeks for oil to reach the gas pump.

Staff writer Tom Barton and the Dow Jones Newswire contributed to this report.

Follow staff writer Tom Barton at twitter.com/EyeOnHiltonHead.