POSTED: 08:03 a.m. HST, Feb 28, 2012
LAST UPDATED: 10:58 a.m. HST, Feb 28, 2012
NEW YORK >> The price of gasoline rose for the 21st straight day on Tuesday. Drivers are now paying an average of $3.72 a gallon nationwide, about 24 cents more than before the streak began.
The winter surge is being driven primarily by the rising price of oil, which has been above $100 a barrel since Feb. 10 as tensions mount between the West and Iran over its nuclear ambitions.
Nationwide, gasoline prices are 10 percent higher than a year ago — and at their highest level ever for the end of February.
Prices are highest in Alaska, California, New York, Connecticut and Hawaii, which is tops at $4.32 a gallon. The statewide average price for gas in Hawaii is 22 cents higher than last month and 57 cents higher than last year.
Honolulu's average price of $4.20 a gallon is 24 cents higher than last month and 52 cents higher than last year.
The rising price of oil isn’t the only factor driving pump prices higher. Every year, refineries must temporarily shut down their facilities in order to prepare them for the production of cleaner-burning gasoline that’s required in summer. This briefly constrains gasoline supplies and puts upward pressure on prices.
Analysts say the national average could peak in late April as high as $4.25 per gallon.
A 30-cent jump in gasoline prices, if sustained over a year, would cost the economy about $41 billion. The Energy Information Agency, a branch of the Energy Department, in early February estimated that gasoline would average $3.55 a gallon this year, 2 cents higher than last year. The EIA also forecast that West Texas Intermediate, used to price oil produced in the U.S., would average $100.40 a barrel, compared with $94.86 a barrel in 2011.
WTI has risen 8 percent to around $107 a barrel so far this year. Brent crude from the North Sea, used as a proxy for the foreign oil that’s imported by U.S. refineries, has gained more than 13 percent to $122 a barrel. The main reason for the increase is increased tension between Iran and the West.
On Tuesday, WTI dropped $2.01, or nearly 2 percent, to $106.55 a barrel. Brent fell $2.62, or 2.1 percent, to $121.55 a barrel.
Petroleum demand in the U.S., the world’s largest oil consumer, has fallen 5.5 percent so far this year, compared with a year ago. A weekly survey by MasterCard SpendingPulse shows that Americans have cut back on gasoline spending for the past 48 straight weeks. Last week, the Federal Highway Administration said that motorists drove 1.2 percent less in 2011.