Oil's recent hot streak pushed gasoline prices in California and the nation to four-month highs, according to a weekly federal survey released Monday.
California's average price for a gallon of self-serve regular gasoline rose 5.3 cents to $2.229, the seventh consecutive weekly increase, the Energy Information Administration said. A year ago, the average was 11.7 cents lower.
The U.S. average bounded higher for the third straight week to $1.999 a gallon, up 7.1 cents, based on a survey of 800 service stations nationwide by the agency, an arm of the Energy Department. The average was 26.1 cents lower at this time last year.
Gasoline prices, which haven't been this high since early November, are following the path of oil prices. Oil futures prices have been rising because the market fears that supplies won't keep pace with increasing demand in oil-thirsty countries such as the U.S. and China.
"There's a huge insecurity premium that's built into the price of oil worldwide," said Tom Kloza, an oil industry analyst for the Oil Price Information Service, which tracks oil and fuel prices.
Kloza attributed much of the recent rally to speculative buying by big investors such as pension funds and hedge funds.
On Monday, crude oil for April delivery settled on the New York Mercantile Exchange at $53.89 a barrel, up 11 cents for the day on top of a $2.04 increase last week.
Pump prices typically rise early in the year, but the timing was different this year, said Jeff Spring, a spokesman for the Automobile Club of Southern California. The annual ramp-up in gasoline prices that usually happens in late February and early March occurred in late 2004 and in January this year, he said.
Prices normally even out by June and drop steadily into fall and winter. The question now, Spring said, is whether prices will spike in September and October as they did in 2004.
"We'll be in for a roller coaster ride, and it's just a matter of how high the highs are and how low the lows are," Spring said. "But it seems like the highs are getting higher and the lows aren't as low."