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Gas Prices Were Highest In 2011

2011 was a record year for gas prices, and although the cost of gasoline has dropped, it probably won?t stay down for long, says AAA Idaho spokesman Dave Carlson.

The Gem State’s annual average price for 2011 was $3.49 a gallon, 2 cents lower than the $3.51 national average, but 54 cents higher than Idaho’s average price a year before.

“(2011) was another strange year as Idaho prices ranged from as much as 20 cents lower than the national mark in February to 23 cents more than the national average in October,” said Carlson in a news release.

In 2008 Idaho and the U.S. set record annual prices of $3.29 and $3.25 with daily record prices of $4.16 and $4.11 respectively, according to AAA.

Gasoline prices typically take their cue from oil prices, which rose as high as about $114 a barrel in April, then dropped to $75.67 by October, AAA said. But rising oil prices collided with dismal gasoline demand data for much of the year. When oil rebounded late in 2011, gasoline prices actually dropped, though not consistently.

In Idaho pump prices tracked between $3.60 and $3.78 for seven months of the year, regardless of what was happening in the crude oil markets. A Wyoming refinery fire in early September likely cut already tight Intermountain region gas supplies, and by Oct. 1, there was already a 30-cent differential between Idaho ($3.70) and U.S. ($3.40) average prices.

Idaho’s average price for regular grade gasoline took a freefall in the last two months of the year, tumbling 47 cents and hitting $3.11 by year’s end, a price motorists hadn’t experienced since last February. The U.S. average price bottomed out during the third week of December at about $3.21. Since then, it has risen to an average price of $3.37.

Despite the recent declines in Idaho gas prices in the past eight to 10 weeks, current retail gasoline prices are at historic highs for this time of the year. Oil and gasoline futures prices are similarly situated above where they were a year ago, which AAA says is likely a harbinger for this spring’s gasoline prices.

For instance, oil is trading around $102 per barrel, compared to about $89 a year ago. Investors taking their cues from incredibly brisk demand growth from emerging economies, robust export demand, and Iran’s threats to close the Strait of Hormuz, may help send crude oil prices higher in 2012. Even the fear of disruption on global oil supply can push prices higher, according to the news release.

But if the economic stability of the European Union, global economic weakness and the associated decrease in demand prevail, there could be widespread swings in oil and gas prices similar to 2011. Last week’s Department of Energy report showing stock builds for both crude oil and gasoline suggest there is a continued sluggish demand for gasoline.

?It’s quite reasonable to assume we’ll see sharply higher pump prices by April or May,” Carlson said.

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