With oil trading close to $105 a barrel overseas on Tuesday, gas prices in the Shenandoah Valley continue to climb.
The average price of a gallon of regular unleaded gasoline in Virginia Tuesday was $3.55. That's up from $3.06 a year ago.
Dr. Pam Drake, a Professor of Finance at James Madison University, says the increasing gas prices right now is a strange situation.
Dr. Drake says demand for gas right now is relatively low and supply of gas is actually fairly high. Ordinarily, the combination of high supply and low demand would mean much lower prices.
However, fear and speculation on overseas turmoil especially in Iran and Syria are driving up future crude oil prices.
Even so, Dr. Drake says the speculation that drivers could be paying $5 per gallon for gasoline by the summer is not likely to be a reality.
"I don't think that will be a reality given the supply and demand situation," Drake said. "I mean it's one thing to be worried about what's going to happen with the turmoil overseas, but I think that makes up a component of the price but I don't think it can drive it that high."
Still, Dr. Drake says the U.S. response to rising prices is going to important, especially when considering whether to produce more oil domestically, including opening the coast to offshore drilling.
She also points out increasing environmental regulations concerning pollution and oil refining are also increasing the price drivers pay at the pump.
© Copyright 2013 WHSV / Gray Television Group, Inc. All Rights Reserved.