HOUSTON - The cost of a fill-up continues to rise, in the new year, as demand grows and fuel supplies tighten.
Oil started the week at $81 a barrel, up $10 in the last month, while the average price for gasoline, in Houston, has risen $0.40 at the same time, to $2.99.
As he filled up his heavy-duty pickup, and trailer, at a Richmond gas station, landscaper Mike Melcher is thankful business is strong but says it's expensive to keep his crews fueled and on the road.
"It was nice a few weeks ago when it was down to $2.30," he says. "But now it's going up to almost $3.00! I have five vehicles running almost every day, and I notice it right here in my pocket."
Houston energy analyst Andy Lipow says there are challenges keeping-up with brisk demand for oil and fuel.
"I think oil prices are moving faster than I anticipated," he says.
As China emerges from tight COVID-19 restrictions, the country's energy demand is expected to consume an additional million barrels of oil a day, which will stretch global supplies.
On top of that, domestic fuel supplies are tighter than they should be.
The December deep-freeze slowed a lot of refining capacity, and refineries that put off important maintenance, dating back to the early pandemic, can't wait any longer.
"Gasoline inventories are 6.5% lower than this time last year," says Lipow. "As we go into very heavy refining maintenance schedule, over the next couple of months, I expect that gasoline prices, as we go into the spring, are going to increase another $0.20 a gallon."
It's not news that comes as much of a surprise for Mike Melcher.
"I don't see it getting any better," he says. "I just don't see it, so I'll take it one day at a time."
While Lipow is sticking with his projection that oil will settle at around $90 a barrel, by the end of the year, there is encouraging news that U.S. refiners are planned to add more than 400,000 barrels of fuel capacity in the coming months, which will help take the edge off the rising prices.