Gas Prices Hit Record High This Year

Uprisings abroad and increased demand drove up cost of gas

By Lauren Steussy
|  Friday, Dec 30, 2011  |  Updated 2:08 PM PDT
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Gas Prices Hit Record High This Year

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Taking a look back at finances for the year, you may see a bulk of your expenses was put into your pump.

The average price of gas in 2011 was $3.82 – the highest average in about 40 years, according to our media partner, the North County Times.

A unique set of circumstances impacted the cost of buying oil – namely the Arab Spring. Investors became nervous that the uprisings would upset oil-producing countries such as Saudi-Arabia.

During the time of these uprisings in May, gas prices in San Diego hit $4.27.

Another factor in the rise in cost was an increased demand from countries such as Brazil, China and India.

The rise worries those who see an economic recovery in the country’s future, since gas tends to be a priority over other kinds of consumer spending.

However by the end of this year, consumer confidence rose and many indicators pointed to a slow but steady recovery. The same may be true with gas prices, said Severin Borenstein, co-director of the Energy Center at UC Berkeley to the NCT.

Another set of political turmoil – such as new confrontation in Iran -- may offset this decline, but new methods of producing crude oil will help.

"If you look at the futures market, oil for a year or two in the future is predicted to be cheaper than current oil," Borenstein said.
 

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