With average U.S. oil prices at their highest for this time of the year, gasoline prices likewise climbed to their highest average for the first 12 weeks of the year, according to Energy Department statistics.
The benchmark West Texas Intermediate crude rose 16 cents Monday to $107.03 a barrel on the New York Mercantile Exchange. That helped push up the national average for a gallon of regular gasoline 5.1 cents over the last week to $3.918, the Energy Department said. That was 32.2 cents higher than a year earlier.
In California, the average price for a gallon of regular gasoline fell for the second straight week, dropping 1.6 cents to $4.359 a gallon.
Analysts weren't willing to bet that California gasoline prices had peaked. Moreover, they were concerned about the continuing rise in prices across much of the U.S.
"We're 31 cents per gallon ahead of our year-ago pace" for the national average, said Patrick DeHaan, senior petroleum analyst for real-time gas-price forum GasBuddy.com. "I'm seriously contemplating revising my forecasts upward, having seen things race higher and faster than expected."
The average price for a barrel of oil is far below the record of $147.27 set in the summer of 2008, but oil prices have never begun a year at such consistently high levels as those during the first 12 weeks this year.
The benchmark West Texas Intermediate has averaged $104.40 a barrel this year, according to the Energy Department. That's a pace that would break the previous record average of $99.75 a barrel set in 2008. Last year, the average for a barrel of oil was $95.11.
Analysts blamed the high prices on continuing concerns that Iran was developing nuclear weapons, which might prompt an attack by Israel.
"At the end of the day, we have one heck of an Iran premium built into the current price for oil," said Phil Flynn, an oil analyst for PFGBest Research. "Assuming nothing else goes wrong in the Middle East, we're near the top, but that is a big if."
Another expert, Oppenheimer & Co.'s senior energy analyst, Fadel Gheit, sent a note to investors on potential earnings for the oil industry. His figures were based on the assumption that U.S. oil prices would average $105.74 a barrel in the coming weeks.
Gheit said that oil prices were inflated and should be no higher than $80 to $85 a barrel given the low demand for the commodity in the U.S., widespread debt problems in a floundering Europe and slower growth in China.
"But the market has built up prices over the risk of a shooting war involving Iran," Gheit said. "The region is already a tinderbox."
That wasn't the end of the bad news for U.S. motorists. The cost of the oil the U.S. imports is based on the European benchmark for commodities trading, Brent North Sea oil. On the London commodities exchange, Brent oil was far higher, rising 52 cents Monday to $125.62 a barrel.