Gas prices expected to continue rising

Published: Tuesday, January 3, 2012 at 9:21 a.m.
Last Modified: Tuesday, January 3, 2012 at 9:21 a.m.

The New Year began with gas prices about 30 cents a gallon higher than they were a year ago in Florida, and with analysts predicting prices will be rising by several cents a gallon for at least a couple of weeks.


Average unleaded gas prices in Florida

Current - $3.313
Week ago - $3.250
Month ago - $3.294
Year ago - $3.096

Source: AAA

Nationally, prices rose four cents a gallon on average between the Christmas and New Year's holidays while prices in Florida increased by about six cents a gallon on average.

A major factor expected to drive prices during at least the first half of January is at least one indication that the U.S. economy is improving.

The U.S. Energy Department recently reported that the nation's oil stockpiles have fallen to their lowest levels in three years, a report that analysts viewed as an indication of increasing domestic demand.

Another factor likely to drive prices higher is the Iranian threat to stage a blockade in the the Strait of Hormuz. The strait is the shipping channel for about 20 percent of the international oil supply. The threat was issued after the U.S. and European nations discussed possible sanctions on Iran to halt that nation's nuclear program.

In her weekly news release about gas prices, AAA spokeswoman Jessica Brady said average pump prices nationwide could reach $3.40 a gallon by mid month.

"We're likely to begin the New Year with a rally of optimism in the oil market as the U.S. economy is forecast to continue to improve, coupled with concerns over Iranian tension and the possibility of a disruption in the country's oil exports," Brady said. "This means motorists could see pump prices increase throughout the first half of January.”

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