Gas Hits High Before Holidays

Jan 28, 2011

Gasoline prices have hit a two-year high heading into the holiday season, according to the New York Times.

Retail gas prices have been rising briskly over the last month, tracking crude oil prices, which rose on surging imports by China and a weakening of the dollar, reported the Times.

The average national price of gas rose over the last week to $2.98 a gallon, up from $2.90, according to AAA's Daily Fuel Gauge Report. Although specialists say prices have probably peaked for the month, the price at the pump is now 35 cents a gallon higher than a year ago.

The Oil Price Information Service has estimated that consumers will pay $34 billion this month for gasoline, up from about $27.6 billion in December 2009.

A 10-percent rise in crude oil prices in the last three weeks, to as much as $90, has been particularly onerous to a few regions of the country, such as parts of Long Island and New England, which still depend on heating oil. On Dec.10, oil prices fell by 58 cents, ending the day at $87.79.

The Energy Department has estimated that oil demand in 2010 rose 1.7 percent, or 320,000 barrels a day, from last year. The department expects that demand will increase an additional 0.9 percent, or 170,000 barrels a day, in 2011. The nation now consumes 19.1 million barrels a day.

In its Dec. 10th report, the energy agency raised its global forecast for crude oil demand for 2011, but it still projects only a modest increase of 1.4 million barrels a day from 2010 levels, to 88.8 million barrels a day. That compares to an increase of 2.4 million barrels a day in 2010 over 2009, reported the Times.

[via Automotive Fleet]

Photo courtesy of Celeste Lindell and re-used under the Creative Commons license.