As turmoil continues in Iraq, U.S. consumers are paying above-average gasoline prices that hit a six-year high Wednesday for June 18 and are likely to remain up this summer, according to the AAA.
While gasoline prices often peak in spring and drop in June, that's not happening this year. In fact, the $3.67 average national price for a gallon of regular gasoline Wednesday is higher than it has been on that day since 2008 and is close to this year's peak of $3.70, which occurred on April 28, reports AAA, a not-for-profit federation of 50 motor clubs.
"Despite hopes for a less expensive summer, it looks like Americans are stuck paying above-average gas prices," says AAA spokesman Michael Green. In May, AAA predicted the national average might decline 10-15 cents per gallon this month, but, given the instability in Iraq, it no longer expects that.
Before Islamic Sunni militants took control last week of Iraq's northern city of Mosul, Green says U.S. gas prices had declined 32 out of 44 days. Since then, they've steadily risen along with global oil prices, which account for at least two-thirds the cost of gasoline.
"If the situation (in Iraq) continues to get worse, American consumers can expect to pay more at the pump," Green says. He says it's possible summer prices could surpass the spring peak.
The last time this happened was July 17, 2008, when the national average for gas prices reached its all-time high of $4.11 per gallon. At that time, global oil prices reached nearly $150 per barrel as strong economic growth in Japan and China boosted demand.
Oil prices are not nearly that high, but they've generally risen in the last week. The U.S. benchmark crude oil, West Texas Intermediate, hovered at $106 a barrel Wednesday while Brent, the international benchmark, stood at $114 a barrel.
At this time a year ago, gas prices averaged $3.61 per gallon nationwide but were already on the decline from their spring levels.
On Wednesday, they were up a nickel per gallon from last week, and they exceeded $4 in three states: Alaska, California and Hawaii, according to AAA's daily monitoring of sales from 100,000 gas stations nationwide. Prices were lowest in South Carolina and Mississippi at about $3.40 per gallon.
Another price tracker, gasbuddy.com, reports that average gas prices hit 15-month highs this week in 14 states, including the Midwestern states of Michigan, Illinois, Minnesota and Wisconsin.
Tom Kloza, senior energy analyst for gasbuddy.com, expects national prices to top out at about $3.75 a gallon. "That's higher than what we envisioned earlier this year," he says, "but it factors in the fear premium that is now reflected in crude oil prices."
Contributing: Gary Strauss