Just in time for the holidays, consumers may see the average price of a gallon of gasoline climb back to $3 nationally and as high as $3.25 a gallon in California, experts said Wednesday.
Pump prices have been rising steadily. Just last month, only four states averaged more than $3 a gallon, according to the Oil Price Information Service, which tracks prices at about 100,000 retail outlets. Three of those were the states that often have the dubious distinction of being the only states above $3 a gallon — Alaska, Hawaii and California.
On Wednesday, 10 states were averaging between $3.01 and $3.52 a gallon, and 12 more states had climbed above $2.90 a gallon, according to the information service. California fuel prices have risen just 3 cents on average over the last month, but Wednesday's $3.182 a gallon was the most expensive by far in the 48 contiguous states.
The federal government's weekly gasoline survey, released Monday, put California at an average price of $3.175 a gallon and the U.S. at $2.892.
"The good news is that we won't go to $4 a gallon," quipped Fred Rozell, director of retail pricing for the Oil Price Information Service, who said consumers might find the recent price increase all the more galling because supply and demand weren't the factors driving it.
"It's all a reaction to what we were seeing in the crude oil market over the past several weeks. Lots of traders have been pouring money into commodities. It's all a financial play," Rozell said.
He was referring to the fact that prices for several commodities, including gold, cotton and sugar, hit record highs this month as investors sought a hedge against inflation. Billions of dollars were also flowing into long-term investment bets that crude oil futures would go along for the ride. They did, briefly, breaking out of the range of $75 to $85 a barrel they had been in for more than a year to touch $88.63 on Nov. 11.
"Oil has fallen back to around $83 a barrel, but that rise was enough to kick up gasoline prices at the pump," said Phil Flynn, an oil analyst for PFGBest Research.
But not every analyst saw a Wall Street-driven reason for higher retail gasoline prices.
Patrick DeHaan, senior petroleum analyst for GasBuddy.com, which tracks the highest and lowest gasoline prices in every state and in many metropolitan areas, attributed the last month's increase in retail gasoline prices to refinery production and a large drop in gasoline imports to the U.S.
A strike by refinery workers in France last month, which shut down 12 of that nation's refineries, also played a role. Gasoline that would have been imported by the U.S. was diverted to France, where it would fetch a higher price.
"The strikes are over, but they are still leaving an impact," DeHaan said. "Those refineries were shut down completely, and it can take weeks, if not months, to start them back up again."
Michael Wittner, an analyst for Societe Generale Cross Asset Research, said U.S. gasoline imports hit a six-year low.
The only solace for consumers may come from the belief that the higher pump prices aren't expected to last, especially with oil prices still on the decline. Crude oil futures for January delivery fell $1.80 a barrel Wednesday to close at $81.04 on the New York Mercantile Exchange.
"Oil had a mini bubble, so it's going to be hard to sustain that momentum in gasoline prices," Rozell said. "This won't last long."