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Gas Price Forecast Summer 2012

03/14/2012 12:36 PM ET

Gas Price Forecast Summer 2012 - Gas prices have begun their annual ascent earlier in the year than usual, and this sends a message for the summer forecast that could hurt consumers in 2012.

As of last Friday, the national average is up in recent weeks and more drivers than ever before could soon be paying $5 a gallon. In fact, prices from coast to coast are soaring at an average of $4.230-per-gallon in places like California and $3.91 in New York.

Financial analysts warn the upcoming season for gas prices could be record-breaking, the News reports.

“It’s going to be a nasty year for gas prices,” Patrick DeHaan, senior petroleum analyst for GasBuddy.com, tells the News.

The likely reasons behind the hike include tensions with Iran, growing gas demand from Asia and South America and natural disasters, according to the News.

“This year, the price increases are really based on what’s happening in the world oil market, the crude market,” Wally Smith, vice president of the AAA of Western and Central New York, tells the News.

Inflation adjusted data from the Energy Department’s U.S. Energy Information Administration confirmed that 2011 was a record year. The real annual average for a gallon of regular gas last year hit $3.56, up from $2.90 in 2010, according to the EIA. From its data that begins in 1919, the previous record high was in 1981, at $3.45.

Of course, in 2008 gasoline prices had the longest stretch of $4 or more, but the yearly average was $3.24, as gas prices slid from October to December to less than $2 a gallon nationally.

An increase of 93 cents a gallon could mean average gas prices may rise more than $4 a gallon and could easily approach record highs, he said. In 2004, gas prices had the largest price difference from the new year to their peak, when prices climbed $1.31 per gallon.

If such a gain occurred this year, that would mean the national average could rise to well over $4.25 a gallon, and some areas could see $5 a gallon.

Iran has threatened to close a key oil passageway, the Strait of Hormuz, in possible retaliation for new economic sanctions from the U.S. and the European Union. Iran holds the world’s fourth-largest proven oil reserves, and the world’s second-largest natural gas reserves, according to the EIA.

Should Iran become more hostile and cause a supply disruption, oil prices could soar to all-time highs and approach $175 to $200 a barrel.

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