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Drought could keep gas prices high
Posted: 08.20.2012 at 10:22 AM
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KIRKSVILLE, MO -- If you have noticed a wide variation in gas prices across the Heartland, you aren’t alone.

To the surprise of many across Missouri, gas prices actually went down three cents over the last week to an average of $3.57. Missouri was one of the few states to see a drop as Iowa saw an increase of nearly two cents for an average of $3.67. This compares with the national average of $3.70, up just over two cents from last week.

Gas prices generally begin to go down as we reach the end of summer. But this summer’s drought could slow that trend heading into the fall driving season.

“We have seen the price of ethanol rise just as gas prices have risen lately. And since ethanol is in gasoline, more expensive ethanol is a contributor to higher gas prices and it’s not over yet. As we continue to progress, we continue to realize how bad the drought really is for corn. And since ethanol is made from corn, a higher corn price will make ethanol prices higher and contribute to higher pump prices,” said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan.

The latest drought monitor says 61 percent of the contiguous United States faces moderate or worse drought conditions this week.  Nearly 30 percent is experiencing extreme to exceptional drought.

And with no significant long term relief in the forecast for much of the Corn Belt, high prices have the potential to last into the winter season.

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