January gas prices highest ever, expected to rise above $4
Although winter is generally a time when drivers can enjoy a little relief at the gas pump, last month turned out to be the most expensive January ever recorded. Prices usually decrease in January due to a drop in demand, but consumers experienced higher prices in the first month of 2012 due to a growing U.S. economy, turmoil in the Middle East and oil speculation.
In January, the average price of a gallon of gasoline was $3.37, according to the Oil Price Information Service. Last month's record number is nearly 30 cents more than the previous high for January, which was $3.095 (2011) and markedly higher than the January 2010 average of $2.71 a gallon.
So what caused this record-breaking month? First off, an improving economy typically translates to higher gas prices. Consumers generally use more petroleum as the economy improves. Consequently, as the demand for petroleum goes up, so does the price. The higher demand is reflected in the price of crude oil, which is currently around $100 per barrel. By comparison, the average price for a barrel of oil was $95 in 2011 according to the Energy Department. Crude prices around or above $100 per barrel will likely be a bad omen for U.S. drivers in the months ahead.