Gas prices have climbed steadily for 32 consecutive days, the AAA noted, supported by refinery closures that undermine supply. At the same time, the price of oil hit its highest level in nearly a year. On February 8, Brent crude hit a nine-month peak of $119.17.
Geopolitical tensions in oil producing hotbeds like Iran, as well as natural disasters in key parts of the country, are creating supply shortages that are pushing up the price of oil and further supporting gasoline prices.
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Five dollar a gallon gas "is a real possibility" said John Kilduff, partner at Again Capital in New York. "This is partly being driven by the lost refinery capacity of about one million barrels per day…that's a lot."
Kilduff cited Hess's closure of a key refinery hub in Port Reading, New Jersey in January as a major factor that has sent gas on a tear. "Prices haven't looked back since," he said
"It's one of about eight refineries that have announced closure. Now the East Coast is heavily reliant on [gas] imports when it used to be self-sufficient," Kilduff stated.
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