What’s behind the gas price runup? Depends on whom you ask

The forces driving gasoline prices upward are clear. It just depends on who you ask.

Some lawmakers and regulators pin the blame on financial speculators trading futures contracts for oil.

Others attribute the spike to seasonal changes, as refiners begin switching from producing winter grade fuels to more expensive summer blends.

Or it could be a collision of planned maintenance and unexpected outages at some of the nation’s refineries, which are keeping gasoline supplies low, despite a boon in domestic crude production.

A Fox Business piece suggests the run-up in prices is because oil companies typically slash their inventories late each year, in a bid to avoid state taxes on their stockpiles.

Still another explanation comes from the government’s Energy Information Administration, which says most of the rise in gasoline costs is tied to the widening gasoline crack spread, the difference between the wholesale price of gasoline and the price of crude oil. Late last year, those crack spreads sometimes dipped into negative territory, as a barrel of gasoline was sometimes worth less than a barrel of Brent crude. But the cost of Brent crude has climbed about $6 per barrel between Jan. 1 and Feb. 19, the EIA noted.

The truth is, gas prices are complex and the forces driving them up and down are tough to pinpoint.

“Understandably, people would like to know what’s behind the increase,” said John Felmy, chief economist with the American Petroleum Institute. And, he added, “in Washington, there’s always the attempt to find the villain.”

API, for the record, pins higher prices on climbing crude costs and strong demand for world supplies that “have been struggling to keep up with rising demand.”

U.S. oil production has soared, thanks to the combination of horizontal drilling and hydraulic fracturing to pull crude from dense rock formations in North Dakota and south Texas. But “international production has been less robust,” Felmy said.

Nationally, the average price of a gallon of regular unleaded gasoline is now at $3.78, according to the American Automobile Association, which tracked a 36-day period of daily increases in costs, the longest such stretch in years.

The runup also has come unusually early this year, well before the summer driving season that typically pushes prices higher.