Gas prices set to go higher

CLARKONOMICS: What you pay at the pump is set to rise over the next few weeks after a big run-up in the price of a barrel of oil at wholesale.

The price of oil at wholesale has gone up 56 cents in just weeks. Meanwhile, gas futures are up by nearly 20% over the last couple of months.

This upward trend is in spite of the fact that worldwide demand for gas remains less than robust with the European recession and our own slowing U.S. economy. Yet much of the run-up has to do with continuing fears about what’s going on with Iran and Israel. When that situation is settled, the price of oil will return to normal supply and demand fundamentals.

If you look at supply, we in the U.S. are the marvel of the entire world with what our engineers and entrepreneurs have been able to discover and exploit in new extraction around the continental U.S. You may have heard me talk about North Dakota in this respect, and their incredible boom of jobs in the energy sector.

In your own life, there’s not a lot you can do about the current upward trend in gas prices. What you can do, when it’s time, is to replace your current vehicle with the most fuel-efficient choice in the future. But don’t dump your old gas guzzler before it’s day has come.  Wait until it reaches the natural end of its life.