The specter of $3 gasoline is looming again as Colorado gas prices reached a five-month high Monday.
California already has blown past the $3 benchmark with prices averaging $3.09 on Monday.
While analysts aren’t yet predicting $3-a-gallon pump prices in Colorado, they note that high demand for fuel and low supplies point to rising prices in coming months.
Two of the most powerful market influences – hurricanes in the Gulf of Mexico and conflict in the Mideast – are unpredictable but can push fuel prices far higher, said AAA Colorado analyst Eric Escudero.
“Whether that would make prices hit $3 a gallon or not, it’s too early to tell,” he said.
Colorado’s average price for self-service regular hit a record high of $3.08 in August.
On Monday, the statewide average was $2.48, the highest since October. Colorado prices have risen nearly 40 cents a gallon since hitting a recent low of $2.09 on Feb. 1, according to AAA Colorado. Diesel prices are up 21 cents to $2.79 during the same period.
High crude-oil prices, rising profit margins for refiners, strong demand for fuel from motorists and refinery shutdowns have contributed to the price rise.
“I don’t see a lot of factors to force prices down,” said petroleum analyst Bryant Gimlin of Gray Oil Co. in Fort Lupton. “Everything is pointing up.”
Gimlin said oil companies’ profit margins on refining gasoline from oil have soared in the past month, which is one of the biggest reasons for retail price increases.
Those profits have risen from a nationwide average of $6.76 a barrel on Feb. 1 to $21.33 on Monday.
High refining margins occur when gasoline and diesel are in short supply and demand for fuel is strong, said Steve Douglas, general manager of supply and marketing for Greenwood Village-based Suncor Energy (USA).
But the high profits could eventually work in consumers’ favor, he said.
“Typically, when refining margins widen, refiners do everything they can to maximize production in order to take advantage of the wide margins,” Douglas said. “This will help increase supply to the marketplace, which usually brings (profits) back down.”
The U.S. Energy Information Administration last week forecast that U.S. gasoline prices will average $2.62 a gallon in the second quarter. But Douglas noted that nationwide, prices already are at $2.54, with the potential to rise higher over the next three months.
Crude oil for April delivery fell $1.14 on Monday to settle at $58.91 a barrel on the New York Mercantile Exchange.
Douglas said that when gas hit its record high last summer, crude-oil prices had reached nearly $80 a barrel.
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
