Gas prices on near $3 on near-$100 oil

McALLEN — Blame the extra dime a gallon for gasoline on a weak dollar.

Blame it on China or even Iran.

But increases in fuel costs in the Rio Grande Valley are a product of pure speculation, according to gasoline and oil experts.

Across the nation, and around the Valley, gas prices are back toward record highs.

“Gasoline is now just catching up with the price of oil and the price of oil has been high for the last several weeks,” said Peter Clark, an oil markets expert and professor of chemical engineering at the University of Alabama in Tuscaloosa.

“But again, this is all driven by speculation and this isn’t driven by supply and demand,” he said.

A month ago, gas companies had plentiful reserves, so prices stayed low even with high oil prices, analysts said. But those gasoline reserves are almost gone, meaning fuel refiners are buying their oil right off Wall Street.

At close Monday, oil futures were trading near $94 a barrel.When reserves were still high, gas prices across Hidalgo County were close to $2.55 a gallon for regular unleaded. But as the price of oil remained high, those prices were hard to maintain and they slowly began to inch up.

Some local stations posted prices above $2.95 a gallon Monday for regular unleaded, up 10 cents from the previous day.

The Exxon on located at Alton Gloor and Expressway U.S. 77/83 has gas at $2.95 a gallon while the Stripes at Alton Gloor and Paredes was $2.89.

The weak dollar may also affect the price of oil on Wall Street, said Karen Matusic, a spokeswoman for the American Petroleum Institute, a fuel-research firm run by major oil companies.“I’ve heard that when the dollar is weak that investors are coming into the (oil) market,” Matusic said.

Don’t fret, though.

Clark believes oil prices can’t get much higher now.

“I don’t think it will hit $100 a barrel unless something really bizarre happens,” Clark said.