Gas Prices Reach Highest Price Ever in Month of March, Tops $4 in California

Gas prices reached the highest price ever recorded during the month of March today (Monday, March 28, 2011) according to ABC News. Today the US average for a gallon of unleaded gas is $3.584, according to the AAA Fuel Gauge Report.  The state averages for a gallon of gas topped $4 in California, Alaska and Hawaii. Prices are at their highest level since 2008, in part because of the Japan earthquake and turmoil in the oil-producing Middle East. Gas prices have risen 4 cents in the past week. Gas prices are up 74 cents from one year ago.

Oil futures settled today at $103.98 after reaching a high of $105.76 earlier in trading. On Friday, oil futures settled at $105.40 a barrel, the third consecutive day above $105, according to the Chicago Mercantile Exchange Group.

Continuing unrest in Libya as well as other North African and Middle Eastern countries has led to the highest crude oil prices since 2008.  As a result, the US Energy Administration (EIA) has raised its forecast for the average cost of crude oil to refiners to $105 per barrel in 2011, $14 higher than its previous price estimate.

Some analysts say that despite slight price fluctuations over the next 6 months, consumers should get used to paying higher prices. Other analysts say that once the Middle East violence subside, the risk premium will fall, and that will decrease gas prices.