What's with gas prices?
Gasoline prices are high for this time of year, but they should be dropping in the next few weeks, according to an analyst with Gas Buddy.com, which tracks gasoline prices across the United States and Canada.
In Minnesota, the average price for a gallon of regular gasoline was $3.92 on Tuesday.
That was 6 cents higher than the national average.
"In the next month or so, I could see it dropping to $3.65 to $3.85," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com in Chicago. "I do expect some relief for Minnesota in the weeks ahead."
In Detroit Lakes on Tuesday, the price of a gallon of regular gas ranged from $3.85 to $3.95, according to MinnesotGasPrices.com.
The website tracks gasoline prices and provides gas station-to-gas station comparisons.
Markets sets gas price
Gas prices are high now mostly because investors were betting on continued economic growth, DeHaan said.
"The economy continues to slowly mend," he said. "Oil prices can be shaped by the direction the economy is moving. The general consensus (among investors) is that the economy is improving, so oil prices are up."
The commodities market for oil is not so different than the stock market, he said.
"It's just like Apple stock before the iPhone5, it was slowly going up, now everybody wants in because they know it will be a hot seller," he said.
Of course, investors are a skittish lot, and in the last two days concerns about a worldwide economic slowdown -- and fears of an Israel-Iran war -- have caused oil prices to drop about 4 percent, according to Bloomberg.
Tuesday crude oil prices on the spot market ranged from about $96 per barrel for Cushing to just over $114 for Brent.
Hurricane played a role
Gas prices have also been high lately because supplies are relatively tight following Hurricane Isaac, which shut down significant portions of Gulf Coast refinery capacity for several weeks, DeHaan said.
"A several week shutdown means (the loss of) millions of barrels of oil and hundreds of millions of gallons of refined products -- so supply is tight," he said.
Not that supplies are dangerously low, but "the industry looks at days of supply," he said. If it drops below a three-week supply, "the markets have a mini panic attack," and prices go up, he said. "Going into the fall months, supplies are adequate," he said.
Gas prices are lowest in southern and western states, and highest in California, New England and -- to a lesser extent -- the northern states, including Minnesota.
That usually has less to do with the cost of moving gasoline from refineries and more to do with state gasoline taxes, DeHaan said.
State gas taxes are 67 cents a gallon in California, 38 cents a gallon in Texas and 46 cents a gallon in Minnesota. The national average is 49 cents per gallon, he said.
Affect of 'winter gas'
Tight gasoline inventories may also get some relief from the annual switching from "summer" to "winter" gasoline.
From mid-May through mid-September, refineries produce gas containing less butane that produces cleaner automobile exhaust, DeHaan said.
The rest of the year refineries sell normal gasoline that is cheaper to produce. The switch is required by the Environmental Protection Agency to reduce pollution during the warmer months, he said.
Gasoline prices are unlikely to be affected by the presidential election in November.
"It's a common myth," DeHaan said. "But the president actually has little to do with gas prices -- they can have a small, small influence with their policy, but for the most part it's just supply and demand."
Gas prices dropped under the $2 a gallon mark under both president Obama and President George W. Bush.
Gas prices hit $1.60 a gallon during the financial crisis that Obama stepped into when he took office.
Just a few months earlier, gas prices had hit a high of $4.12 per gallon on July 15, 2008 -- a record that still stands, DeHaan said.