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Economic optimism nudges gas prices up
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Optimism about the economy may start to cost Northeast Georgians at the gas pumps.

For about a week, local residents could enjoy a holiday gift of prices less than $3 per gallon at many fuel stations in the region. Those prices were still higher than last year's holiday travel season but significantly lower than prices were just months ago.

However, experts on gas price trends don't expect those prices to stay low for much longer. As of Wednesday afternoon, only two gas stations in Gainesville were still selling fuel for $2.99 per gallon, according to the online gas index, GasBuddy.com. Those holdouts could quickly change, as gas prices throughout Georgia are averaging about $3.17 per gallon, according to the AAA website.

"We are seeing prices start to inch back up across the board," said Jessica Brady, a spokeswoman for AAA.

There are several reasons that prices are rising after a fairly steady decline since Labor Day.

As Patrick DeHaan, a senior petroleum analyst for GasBuddy.com, told The Times, "there is a whole lot of complexity in gas prices."

Proposed new sanctions against Iran and a reduction in U.S. crude oil stockpiles are playing a role, Brady said.

A third reason, she said, is that improving economic trends are driving up optimism in the markets.

In recent weeks, positive economic news, like a reduction in unemployment rates, has raised expectations of growth.

Brady said those expectations are also raising the price of crude oil. In the last week, the price rose above $100 per barrel, according to Bloomberg News.

"It really is a double-edged sword for consumers," she said. "We want all of this (growth). Unfortunately, when this happens, people see fuel demand going up."

The steady decline of fuel prices near the end of this year is not expected to pick back up yet.

"For the next couple of weeks, we're going to see upticks or stabilization," Brady said. "No decrease, though."

Still, prices can change drastically from one day to the next depending on multiple factors, according to DeHaan.

This year was one example of unexpected changes creating an abnormal year for gas prices.

Early months tend to see stabilization or a decrease in prices as demand is down, Brady said. However, protests in Egypt and fears of the disruption in oil delivery created an abnormal spike in gas prices in early 2011.

 

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