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Just How High Will Gas Prices Go in 2012? – Dollars and Sense

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Joe Raedle, Getty Images

Remember the summer of 2008 when the highest gas prices on record occurred and the price for a gallon of fuel hit $4.11?

Hate to break this to yah, but a warm winter and tensions in the Middle East have some analysts predicting current prices will top $4 by this spring — and could even climb as high as $6.50.

Normally at this time of year, cold weather and the need to pay off holiday bills means drivers stay home, which decreases the demand for fuel and keeps prices low. But that hasn’t happened this year since people are out driving more, possibly due to warmer temperatures.

That increased demand meant January was the most expensive month for gas ever — $3.37 — and AAA’s Fuel Gauge says the national average this past Monday stood at $3.48. If things go as the analysts believe they will, increases in seasonal and global demand will cause gas prices to hit $4 a gallon by summer or early spring.

Tom Kloza of the Oil Price Information Service predicts a national average of $4.05. He and others say that in New York City, Washington, California, and Hawaii — places where gas prices are higher than the US average — residents there may see prices of $4.50 or more at the pump.

In addition, the Gas Buddy blog mentions that Defense Secretary Leon Panetta recently discussed the likelihood of Israeli air attacks on Iran. If that comes to pass, oil prices could quickly double and surpass $200 a barrel. “So if you’re seeing $3.50 a gallon in your local market,” the blog says, “and Israel attacked today, add $2.50 to that and now we’re looking at $6 gasoline.”

And if Israel instead took that action in the spring, when gas prices are already expected to reach $4, it could get even worse. “As incredible as it sounds,” Gas Buddy bloggers write, “your gasoline would be $6.50 per gallon.”

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