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Gas prices up as crude, ethanol increases reach consumers

By the CNN Wire Staff
STORY HIGHLIGHTS
  • The latest Lundberg Survey finds prices increased 5 cents
  • Gas retailers are increasing their profit margin
  • The cheapest gas was found in St. Louis, Missouri

(CNN) -- U.S. gas prices rose by a little more than a nickel over the past two weeks, as recent increases in crude prices made their way to the pump, according to a new survey of filling stations.

The latest Lundberg Survey, conducted Friday, found the average price of self-serve regular gasoline was $2.82 per gallon.

That's 5.23 cents higher than from the last survey two weeks ago, survey publisher Trilby Lundberg said.

Retailers raised the prices to raise their profit margins, which had fallen in previous weeks, she said. The profit margin had shrunk as crude prices rose recently.

A weaker dollar, falling in part because of bad employment numbers and expectations that the Federal Reserve may increase the money supply, are behind the increase in crude prices.

A second factor behind the rise in gas prices are higher prices for ethanol, Lundberg said. There are mandates requiring certain amounts of ethanol to be sold mixed in with gasoline.

"Ethanol is up substantially in the last couple of weeks, and it makes a mark on gasoline prices," Lundberg said.

Even if prices of crude oil remain steady, further increases of prices could be expected for the same reasons, she said.

While crude and ethanol prices may affect gas prices, two factors that are definitely not moving prices are the supply and demand of gasoline.

"Our demand remains very weak and our supply very strong," Lundberg said.

The Lundberg Survey sampled prices at about 2,500 gas stations. The highest average prices in the continental United States were found in San Francisco, California, at $3.16. The lowest were in St. Louis, Missouri, at $2.59.

Average per-gallon prices in other cities:

Atlanta, Georgia: $2.73

Boston, Massachusetts: $2.85

Chicago, Illinois: $3.01

Houston, Texas: $2.63

Indianapolis, Indiana: $2.83

Miami, Florida: $2.82

Philadelphia, Pennsylvania: $2.87

Salt Lake City, Utah: $2.80

Seattle, Washington: $3.05