Gas Prices Rising, Could Reach $4/Gallon By Summer
MIAMI (CBSMiami) – If you haven't already noticed, prices at the pump are on the rise and gas prices are expected to go even higher this year, possibly as high as $4 a gallon or more during the summer.
Analysts blamed the increase in gas prices on speculators, who fear a drop in oil supplies coupled with a rise in demand.
2011 saw the highest yearly price per gallon average ever but 2012 could be even higher.
"I think it's gonna be an ugly year," said Patrick DeHaan, a petroleum analyst for www.GasBuddy.com.
"Prices are becoming a lot more volatile. Demand for oil is going up in the world and I think that's making one of the biggest changes here is that demand is rising."
The rise in demand is not coming from the U.S., but from countries like China. Adding to oil concerns right now is recent talk from Iran that it might cut supply.
"I think a lot of it is fear. There's not much else to explain it; a lot of fear. And if we bring out the s-word that everybody's familiar with, 'speculation' is certainly dominating the market," DeHaan said.
That speculation has been causing the rapid rise and occasional gas price drops. It's something drivers have to live with.
Increases already have been significant. Florida finished 2011 with prices averaging a $3.25 a gallon, up 20 cents from a year earlier and a year-end record. They rose to an average $3.33 a gallon Wednesday. Prices usually rise at least 90 cents by summer, so that means gas topping $4 a gallon in July, analysts say.
