The latest fuel price report from AAA says Austin gas prices have risen to an average of $2.91 for a gallon of regular unleaded. That's up about 10 cents from last month and almost 30 cents higher than it was this week last year. And most signs point to gas prices climbing even higher.
OPEC nations are meeting in Cairo today and Kuwait's oil minister was quoted as saying the global economy could handle oil prices of $100 a barrel. A barrel of light sweet crude for February delivery is currently trading on the NYMEX at $90.96.
The US Energy Department reported this week that gasoline prices could exceed $4/gallon in 2011, reports Marketwatch.
“Retail gasoline and diesel prices are usually near their lowest point for the year between December and February,” said Brian Milne, refined fuels editor at Telvent DTN. But the run-up in prices started in the fourth quarter, with prices continuing to climb on expectations that “an improving U.S. and world economy will bolster demand for fuel.”
InvestorPlace goes one step further with a list of reasons why we could be paying $5/gallon this summer. Their reasons: OPEC, big oil, supply problems, higher demand from healthier economy, and inflation.
Meanwhile, higher gas prices are helping consumer confidence slip nationwide, according to new economic data released today. Bloomberg reports the Thomson Reuters/University of Michigan preliminary index of consumer sentiment for January dropped to its lowest rate since November.
The drop in optimism “reflects a frustration with the lack of labor market progress,” David Semmens, a U.S. economist at Standard Chartered Bank in New York, said before the report. “Until employers start hiring aggressively enough to bring down unemployment, improvements in consumer sentiment will be slow.”