Over the last week, prices have begun to head higher in much of the U.S., from an average of $2.46 to near $2.50 today. Last week featured higher wholesale gasoline prices as a result of a change in market sentiment. As prices have headed higher, they have seemingly ignored some traditional fundamentals like supply and demand, and have concentrated more on economic news and the U.S. dollar.

Gasoline prices in Canada have risen has well, but at a slower pace. They currently stand at an average of 97.8c/L this morning but will also continue to rise for the same reason- a shift in trading sentiment. It would seem that gasoline and oil prices are almost completely tied to the stock market as of late; the stock market climbs and oil and wholesale gasoline prices rise. If the Dow falls, so does oil and gasoline.

This change brings risks- currently traders seem to be betting on a recovery soon in the U.S. economy, bringing higher demand. If earnings reports don't agree, oil and wholesale gasoline prices may plunge. By the end of the week, I anticipate the average U.S. price for a gallon of self-serve regular to be $2.56, while Canada may flirt with $1/L. If you need gasoline, fill your tank sooner rather than later.

Patrick DeHaan
Senior Petroleum Analyst
GasBuddy.com