Gas prices in the US are currently averaging $3.85 for a gallon of regular unleaded. As painful as that is, some analysts think prices could increase to $5 per gallon.
If you think gas prices are high right now, some experts are saying ‘just wait’. There are several highly probable factors on the horizon that could drive gas prices even higher. If the dollar continues to weaken, if the violence in the Middle East continues to escalate, if the economy continues to rebound, or if hurricane season is severe this year, gas prices could shoot through the roof.
Five dollar gas is really not that hard to imagine. In some states it actually already exists. Several reports surfaced last week that five dollar gas prices had been seen in several states across the US including Florida, Connecticut and California.
Here in San Diego, the average price for regular gas is $4.203, an increase of 1.9 cents over last week, 23 cents above last month, and $1.10 higher than last year. In Los Angeles, gas prices are averaging $4.218 per gallon, which is 2.2 cents more than last week, 25 cents higher than last month, and $1.12 higher than last year.
Oil prices have risen more than 30 percent in the past two months. Crude oil prices lifted above $112 per barrel on the New York Mercantile Exchange Friday while the dollar turned higher after three days of weakening. The dollar hit a 16-month low against the euro on Thursday and also weakened against the yen. Since oil is priced in dollars, it becomes more attractive to buyers holding foreign currency as the dollar gets weaker.