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Gas prices on the rise: Here's why

So much for $2 a gallon gas.  Gasoline prices are on the rise, even as oil continues to hover around 7-month lows.

The average price of a gallon of gas has increased every day for nearly a month, according to AAA. It’s the longest streak since last spring. The national average today hit $2.31 a gallon.

A 123-day streak of gas price declines began in September and ended in January.  Economists cheered along the way making much of all the money staying in consumers were saving and could spend elsewhere.

But you can't drive past a gas station without seeing how much gas is going for, so when prices go up, consumers see and feel it.  But even as prices have quietly climbed in recent weeks, they are still relatively low.  Consumers are paying about $1.11 less today than they were a year ago.

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But is the heyday of low gas prices behind us?  “It’s not over because it’s still a lot less than it was year ago and certainly 6 months ago,” says Yahoo Finance’s Aaron Task, “but the direction has changed for sure.”

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Home heating costs are climbing as well.  Demand for heating oil and diesel to fuel power plants is on the rise.  According to the Wall Street Journal, home heating oil suppliers say they expect imminent shortages.

So what about that oversupply of crude oil?  We hear so much about that's been driving up prices since last summer.  Crude oil-- which has been down as much as 60% since last June-- is the raw material that goes into gasoline, heating oil, and diesel fuel among other kinds of fuel.  It needs to be refined to make those products. However, refineries are slowing down.

“Refineries are in what’s called the 'shoulder season,' where they shoulder some of their capacity,” says Task.  Gas prices typically rise this time of year because many U.S. oil and gas refineries shut down to perform maintenance. As a result, prices peak in the spring as a result just as weather warms up and drivers start driving more.  “So there’s a huge mountain of crude oil sitting out there…But it’s sitting there and it’s not getting to the refineries,” Task says.

Oil was up slightly at the time this story was published on news that Libya’s largest oilfield stopped production due to a power cut. But traders are also waiting on figures from the American Petroleum Institute on Tuesday and the U.S. government's Energy Information Administration on Wednesday. Analysts expect U.S. crude stocks rose by 4 million barrels to a record last week, according to a Reuters survey.

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