Gasoline prices may not have reached the $4 a gallon level, which is often considered the point at which anxiety about the price creates large cracks in consumer spending. However, the price is roaring higher, up well over 10 cents in the past month. If oil supplies from troubled, crude-rich nations around the world are interrupted, or even if there is a strong sentiment they might be, gas could push well above its current $3.53 per gallon national average for regular.
Just a month ago, the price of a gallon of regular gasoline was $3.40.
In large states, which include more than a quarter of the U.S. population, the price of regular already has started to approach $4. In California, with its 38 million residents (12% of the national total), it has reached $3.98. In New York and Illinois, it is above $3.75.
For drivers who use premium gas, the problem is much worse. The national average per gallon is $3.88. To fill a car or truck with a 16-gallon tank costs more than $60. The price of premium in California has reached $4.17, and it is above $4 in Connecticut, Illinois, Michigan and New York.
While oil prices are not the only component of gas prices, it is still the lion’s share. Recently, the CEO of Chevron Corp. (NYSE: CVX) commented that “$100 a barrel is the new $20,” a signal that crude prices are unlikely to dip sharply again as they did during the recession, when they dropped to $40 after peaking at $130 in mid-2008. West Texas Intermediate (WTI) crude prices have hovered around $100 for the better part of the past two months.
The largest oil-producing nations around the world include Iran, Iraq, Venezuela and Nigeria. As political and military tensions with Russia rise, it is worth noting that it produces about 12 million barrels a day, or 13% of the global average. If the instability of any of these countries moves sharply higher, so likely will the price of crude.
For more details, see the 24/7 Wall St. analysis of oil prices.
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