The strategic Strait of Hormuz, bordered by Iran and the United Arab Emirates,… (NASA / Associated Press…)
Retail gasoline prices jumped higher over the last week in California and across the rest of the nation, adding to what was already a record start for a new year.
The average price of a gallon of regular gasoline in California rose 6.5 cents to $3.696 a gallon, shattering the old record set a year ago of $3.344 a gallon, according to the AAA Fuel Gauge Report. The AAA numbers are the averages of daily credit card receipts collected from more than 100,000 retail outlets by the Oil Price Information Service.
Nationally, pain at the pump was rising at an even faster rate, up 9.5 cents a gallon over the last week to $3.374. That easily surpassed the old record for this date of $3.088 a gallon. Analysts cited two reasons for the rising prices: exports draining U.S. supplies and rising global tensions that were driving up the price of oil.
"Weekly U.S. gross distillate export estimates (bound primarily for European and South American markets)," the Energy Department said today, "were at record levels in the fourth quarter of 2011, topping more than 900,000 barrels a day in October and November, and exceeding 1 million barrels a day in December."
Hedge fund speculators are also pouring money into the oil markets, according to the Commodities Futures Tradfing Commission. Part of the speculation was based on indications of stronger U.S. economic growth, but it was also based on continuing threats by Iran, which has said it might try to close the strategic Strait of Hormuz.
On average, tankers carry about 17 million barrels of crude a day through the narrow channel, which is equal to nearly one-fifth of the world's daily consumption of oil.
"Gas prices are rising across much of the nation as Iran has continued to threaten closing the Strait of Hormuz, a vital waterway for global oil shipments," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.
DeHaan added that there was no logical reason for oil's jump, since nothing has occurred to disrupt supplies. "I would blame emotion for the recent uptick in gasoline prices, nothing else," DeHaan said.
The ascent of oil prices paused at least briefly Monday, falling 61 cents to $100.95 a barrel on the New York Mercantile Exchange. Oil has risen sharply in the last few weeks after falling to less than $76 a barrel because of the European debt crisis. In London, Brent North Sea oil was down 44 cents to $112.62 a barrel on the ICD Futures Exchange.
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