The global oil balance is already tighter than forecasters expected just a few months ago, because of disruptions in oil output from nations outside the Organization of Petroleum Exporting Countries and by the effectiveness of sanctions against Iran, which is exporting about 750,000 to 1 million fewer barrels a day than it was a year ago.
“The story has been one of a strong stock market, a weaker dollar and continuing geopolitical events,” said Adam Sieminski, head of the federal Energy Information Administration.
He said political strife in Syria, Yemen and Sudan cut off some supplies while the latest price surge was “driven by central bank moves in both the U.S. and Europe” and by “optimism about the economy, which changes expectations about what demand will be going over the course of the next six to 12 months.”
American motorists have seen the national average for a gallon of regular gasoline rise above $3.50 a gallon on just three occasions, but it has never happened this early in the year. Analysts say it’s likely a sign that pain at the pump will rise to some of the highest levels ever seen later this year.
In 2008, average gasoline prices had hit inflation-adjusted records nationally by the summer, but they didn’t climb above $3.50 a gallon across the U.S. that year until April 21, according to the AAA Fuel Gauge Report. It happened again last year, but not until March 6.
But $3.50 a gallon gasoline is already here in 2012, weeks before refineries typically shut down for springtime maintenance, and weeks before the states switch from their less expensive winter blends of gasoline to more complicated and pricier summer blends.