Maine gas prices rose 9 cents last week; crude oil prices could drop

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PORTLAND — The average retail price of gas has climbed a little more than 9 cents in Maine in the past week.

GasBuddy’s daily survey of 1,228 gas outlets in Maine says the average price of gas in the state was $2.19 on Sunday.

The national average gas increased nearly 7 cents to $2.11.

GasBuddy petroleum analyst Patrick DeHaan says gas prices are going up around the country because of speculation of a change or freeze in oil production.

Maine gas prices are still more than 25 cents lower than this time last year, but they are also more than 25 cents higher than a month ago.

National gas prices are also lower than a year ago, but have steadily climbed in recent weeks.

Oil prices decline

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Oil prices slumped nearly 4 percent after a weekend meeting of oil-producing nations failed to result in an agreement to curb production.

The effort to reach a consensus on freezing production to support prices failed after Iran stayed away from a weekend meeting of 18 oil producing nations in Qatar that had been expected to boost crude prices.

“The market basically rallied from $26.05 to levels above $40 on the ‘hope’ that there would be some kind of agreement at Doha. That did not happen,” said Robert Yawger, director of energy futures at Mizuho Securities USA.

Since U.S. crude oil supplies are at all-time highs, Iran is increasing output and Libya is due to step up production, so “prices will trade lower. Maybe sharply lower,” he said.

Oil prices hit a 12-year low in January, dipping under $30 a barrel, but had risen above $40 in recent days, buoyed by bullish talks surrounding the Doha meeting.

The latest setback means prices will likely remain in the doldrums for the time being, though in the longer run the recent cutbacks in investments will help to rebalance supply and demand, said Fadel Gheit, a senior energy analyst at Oppenheimer & Co.

“We believe prices will rise regardless what OPEC does or does not do as U.S. shale oil production, not Saudi Arabia, will be the new swing producer,” Gheit said.

“Time is not on OPEC’s side and technology is its biggest enemy. We believe oil prices will rise to a sustainable level closer to $60, the new normal, not $100 and not $40 either,” he said.

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