Higher pump prices may linger into 2011

Published November 17, 2014

Those stubbornly high gas pump prices might seem like an unwelcome house guest who overstays his welcome, come January.

Drivers in many states already pay at least $3 a gallon for regular and analysts don't expect any relief soon. That's because crude oil has hovered between $83 and $89 a barrel since Thanksgiving.

The national average for regular gasoline was $2.98 a gallon on Monday, according to the Energy Department's Energy Information Administration. That's about the same as a week ago and more than a dime higher than a month ago. A year ago the average was $2.59 a gallon.

In major cities, average pump prices range from $3.29 a gallon in San Francisco to $2.72 in Denver. Drivers in Seattle pay $3.17, in New York City gas costs about $3.12 a gallon. It's $3.11 in Chicago, $3.09 in Miami, $2.96 in Cleveland and $2.80 in Houston.

A new study from business management firm PortiaGroup with data supplied by OPIS finds the average U.S. household will spend about $305 on gasoline this December, up almost 14 percent from last December and 76 percent more than December 2008. Gasoline is taking a bigger bite of median household income this year: 7.4 percent, compared with 6.5 percent last year and 4.2 percent two years ago, the study says.

Energy analyst Jim Ritterbusch believes the national average for a gallon of regular will range between $2.90 a gallon and $3.07 a gallon through February.

"We're going to see comparatively high prices here for a while," he said. "We've seen a stronger-than-expected economy and that tends to augur toward stronger gasoline prices, unfortunately, despite the fact that unemployment is still high."

Tom Kloza, publisher and chief oil analyst at OPIS, expects prices to fall during the winter and then begin to climb again. He has forecast prices between $3.25 and $3.75 a gallon from March to May, barring an unforeseen global economic issue. Pump prices could rise above $4 a gallon again in some states for the peak driving season, if oil prices continue to climb.

And oil prices climbed again on Monday, as China's thirst for energy showed little sign of being quenched. Platts, the energy information arm of McGraw-Gill, said China's oil demand in November hit an all-time high of 9.3 million barrels per day.

Traders also are monitoring the stock markets for clues about where the global economy may be headed in the New Year. Stocks wavered between small gains and losses on Monday. The Dow Jones Industrial Average closed down about 14 points. The NASDAQ and the S&P 500 were a little higher.

Benchmark oil for February delivery rose 77 cents to settle at $89.37 a barrel on the New York Mercantile Exchange. In other Nymex trading in January contracts, heating oil added 1.58 cents to settle at $2.4895 a gallon, gasoline futures gained 6 cents to settle at $2.3778 a gallon and natural gas gained 17.1 cents to settle at $4.129 per 1,000 cubic feet.

In London, Brent crude rose $1.07 to settle at $92.74 a barrel on the ICE Futures exchange.

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