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Gasoline Prices Expected to Remain High Due to Refinery Snags

Gas station in San Francisco.
Gas station in San Francisco.

Why exactly are gasoline prices rising -- and where will they go?

"Pressure at two ends of the barrel," says Daniel Yergin, chairman of Cambridge Energy Research Associates and CNBC global energy analyst. He joined independent oil trader Eric Bolling on "Morning Call" to explain what's driving the market.

Yergin told CNBC's Liz Claman that the "major reason" for high pump prices is a "mild" disruption in America's refinery system. Because of that, "there 750,000 barrels of capacity that would normally be available," now missing from the market, he said.

The energy analyst also pointed to the escalating strife in Nigeria, where the home of the vice president-elect was blown up on Wednesday -- and which has quietly become the U.S.' No. 3 source for oil imports. Yergin believes gasoline may drop to $2.52 to $2.55 per gallon in the year's second half -- "but keep your eye on Nigeria," he warns.

Bolling, who appears on CNBC's "Fast Money," agrees with Yergin that the refinery utilization "problem" is key. The trader said that the plants are running at about 89% to 89.5% -- when they ought to be hitting 91% to 93%.

He explained part of that inefficiency as a reaction to Hurricane Katrina, after which "refineries have been running all out, as best they can, trying to get product out there" -- and the refinery managers thus put off scheduled maintenances. "And now we're feeling it." Bolling added, "We need to increase supply -- and we're incapable of doing that" for the foreseeable future.