Gas prices rose 20 cents in the Twin Cities area on Tuesday, a day after dropping 6 cents. The top price in these parts is $2.59 a gallon, a 31-percent jump from a month ago, and well ahead of the nationwide 19-percent increase.
The price of a barrel of oil has jumped almost 79% so far this year. It comes as analysts say the demand for gasoline is still dropping.
What’s going on?
According to a report from McClatchy, big investment houses are bidding up the price, in anticipation of the economy turning around.
Big Wall Street banks such as Goldman Sachs Group Inc., Morgan Stanley, and others are able to sidestep the regulations that limit investments in commodities such as oil, and they are investing on behalf of pension funds, endowments, hedge funds, and other big institutional investors, in part as a hedge against inflation.
A year ago, Minnesota — what with its blend of ethanol and all — had the lowest prices in the nation. This year, however, the Upper Midwest is among the higher-priced regions.
Jim Ritterbusch of Ritterbusch and Associates said gasoline prices could be back down to nearly $2 a gallon by the end of summer.
(Photo: Tom Weber)