That would bring Connecticut prices up to as high as $4.11 a gallon for regular gasoline, said the newspaper, second in the Northeast only [image-nocss] to New York, which is facing a potential price hike to $4.16 a gallon.
The last time the country saw prices topping $4 a gallon was in 2008, said the report. On July 8 of that year, the price peaked at $4.35 a gallon in the New London-Norwich, Conn., area; $4.39 in Connecticut and $4.11 nationally, according to AAA.
Customers filling up at the Williams Street CITGO in New London told the paper that revisiting the $4-a-gallon days of two summers ago would be painful but not unexpected.
For the coming holidays, prices are expected to stay "within the realm of where they are today, which is just shy of, or just above $3 [a] gallon," Kloza said, according to the report.
According to Kloza's report cited by The Day, "Fuel Prices Outlook for 2011: The Consequences of a Big Bottom," crude oil and gasoline prices are "incredibly tidal. Last year's swings between ebb and high tides were not altogether different from 25 years of history." That swing in crude oil prices is between 33% and 55%, the report showed.
As crude oil futures prices peak in spring trading, there can be an "irrational exuberance" that causes retail prices to hit "an apocalyptic number before cooler heads prevail," he warned.
Kloza said that if the "bottom" for unrefined gasoline (Reformulated Blendstock for Oxygenate Blending, RBOB) is at $2.10 a gallon, as it was in October, an average increase could lead to $3.25 a gallon for RBOB futures in the spring. That would put retail prices above $3.75 a gallon nationally, he said.
On Tuesday, according to the Associated Press, benchmark oil for January delivery dropped 69 cents to settle at $88.69 a barrel on the NYMEX. The contract hit $90.76 a barrel earlier in the day, the highest price since Oct. 8, 2008. Based on increasing global demand, analysts are predicting that the price of crude will top $100 a barrel next year, the paper said.
"It's fair to say that we traditionally right now are in what is thought of as the bottom of that [autumn] pricing trough, so it certainly is not encouraging that we are starting today at a significantly higher threshold than we were at this time last year," AAA Connecticut spokesperson Jim MacPherson told The Day. "That said, any number of things could happen, so we're not predicting prices, but we're keeping a wary eye on what's happening."
In the United States, the continued rise so far in gasoline prices is counterintuitive, MacPherson said, because nationally, at least, demand does not appear to be what is prompting the increase.
"Demand for gasoline has been relatively flat, up three-tenths of 1% over last year, which was down because of the economy," MacPherson said. "One of the things we're seeing is demand is still exceeding supply by 900,000 barrels a day. What OPIS is seeing is global demand looking at going up [in early 2011 by] 2.2 million barrels per day to 88 million."
Although there have been surplus oil inventories, the continued drawdown in the surplus, coupled with refineries shutting down for maintenance work from January to March, also could push retail prices up, MacPherson said, reporting Kloza's explanations.
"What you're seeing, they are suggesting, is that this is not just a U.S. phenomenon," he said. "We're not looking at a rosy scenario for the future."
Meanwhile, U.S. gasoline demand at the pump slid 2.7% last week as retail prices rose to the highest level in 25 months, according to data in a MasterCard Inc. SpendingPulse report cited by Bloomberg.
Motorists bought an average 9.18 million barrels of the fuel a day in the week ended December 10, the second-biggest payments network company said. That is the first decline in three weeks and biggest week-to-week drop since September 10.
Fuel demand was 1.3% below the same period a year earlier. That's the largest drop in year-over-year consumption since October 29.
The average pump price for regular gasoline rose 9 cents to $2.96 a gallon, the highest level since October 17, 2008. The price was 13% above a year earlier.
Averaged over four weeks, gasoline consumption was 9.27 million barrels a day, down 0.3% from a year earlier, said the report. The four-week average has been below the year-earlier level for 12 consecutive weeks.
Fuel use slipped last week in six of the seven geographic regions, added the report. Demand was down 3.8% on the Gulf Coast and in the Lower Atlantic, 3.4% on the West Coast, 2.5% in the Central Atlantic, 2.1% in the Midwest and 1.7% in the Rocky Mountain area. Consumption rose 3% in New England.
Through December 10, drivers had purchased 0.4% more gasoline in 2010 than during the same period in 2009, the same as the prior week, MasterCard said.
The highest demand this year was 9.71 million barrels a day in the week ended May 28. The lowest was 8.84 million in the week ended Sept. 10.
The report from Purchase, N.Y.-based MasterCard is assembled by MasterCard Advisors, the company's consulting arm. The information is based on credit-card swipes and cash and check payments at about 140,000 U.S. gas stations.
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