A motorist refuels his car in downtown Los Angeles. The average price of a gallon of regular gas in California has risen 2.4 cents since last week and 36.5 cents since a year ago. (Luis Sinco / Los Angeles Times) |
January is typically a month of falling gasoline prices because fuel demand traditionally falters in the slower travel weeks that follow the end-of-the-year holidays.
Not so this year. The last month was the most expensive January ever for retail gasoline as prices averaged out at $3.37 a gallon, according to the Oil Price Information Service (OPIS) in New Jersey. That compared with the previous record average for the month of $3.095 a gallon SET last year.
In 2010, January gasoline prices averaged just $2.71 a gallon.
The new record meant more pain in Americans' budgets. A typical household, burning about 50 gallons of gasoline a month, had to pay about $168.50 for that fuel in January, or $33 more than it did in 2010.
High oil prices was one reason. Refineries exporting large amounts of fuel overseas was another. But a third reason was stock market speculation. Traders were pouring investment money into commodities markets. They were betting that gasoline prices would keep rising, said Tom Kloza, chief oil analyst OPIS.
"Among large hedge funds and commodity pools, there is nearly $10-billion more money than last year bet on a higher price outcome for gasoline futures than on a lower price outcome," Kloza said.
Meanwhile, prices have continued to rise and remain at record levels for this time of the year. In California, the average cost of a gallon of regular gasoline was $3.771, up 2.4 cents since last week. That was also 36.5 cents a gallon higher than the old record for Feb. 6, which was set just last year.
Nationally, the average for a gallon of regular gasoline was $3.480, up 5.1 cents since last week. That was also 35.6 cents a gallon higher than the old record, set last year.
The forecast for retail gasoline prices this spring was also gloomy.
Patrick DeHaan, senior petroleum analyst for GasBuddy.com, said "Gasoline prices tend to start moving significantly higher toward the end of February and into mid-March, so motorists should be preparing for higher prices."
In other energy news, oil prices were down slightly during the trading day, falling $1.26 to $96.72 a barrel on the New York Mercantile Exchange and down 85 cents to $113.73 a barrel on the ICE Futures Europe Exchange in London.
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