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Expert: $3.75 per gallon for gas this spring
By Donna Leinwand, USA TODAY
Drivers in the USA could be paying as much as $3.75 a gallon for gas this spring, oil experts predict.
Prices at the gas pump have inched up all year as the cost of crude oil neared $100 a barrel. On Christmas Day, the average nationwide price of self-serve regular hit $3, a record for that day. By year's end, the average price reached $3.06.
Prices creeping toward $4 a gallon could have dire consequences for some industries and slow the economic recovery, analysts say.
The record price is $4.11 a gallon on July 17, 2008.
"We learned in 2008 that $4-a-gallon gas is a deal-breaker for the economy," says Joel Naroff, president of Naroff Economic Advisors. "If it happens, it's not sustainable. There's only so much the consumer will bear."
He says drivers who need gas to get to work will buy it, but they'll cut spending elsewhere, sucking money out of the recovering economy.
Consumers react when the price reaches $3.50, says Tom Kloza, chief oil analyst for the Oil Price Information Service. People living paycheck to paycheck will cut back on other spending to compensate for higher gas prices, he says, and gas at $4 a gallon "throws us into a consumer slowdown."
"Oil prices ripple through every part of the economy," Kloza says. "I think it'll be the second highest year for oil prices on record."
He predicts the price of a gallon of gas will range from $3.25 to $3.75 in the spring and crude oil will exceed $100 a barrel for a short time. He attributes much of the increase to speculation in oil futures.
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