Global demand sets pace on gas prices

Nov. 7, 2011 at 4:46 PM

BELMAR, N.J., Nov. 7 (UPI) -- High prices at U.S. gasoline stations can be blamed on global demand, an industry analyst said Monday.

"Demand for gasoline is down in the United States by 4 percent compared to last year, but global demand has more than made up for that," Tom Kloza, chief oil analyst for Oil Price Information Service in New Jersey, said.

Kloza said much of the increased demand this year has come from South America, the Los Angeles Times reported.

U.S. fuel exports to South America have increased, especially diesel fuel, which has increased as a percentage of total fuel production, Kloza said.

The national average price on the AAA Fuel Gauge Report is $3.407 per gallon, easily a record for this week of the year. The previous record for this week of the year was $3.013 per gallon, set in 2007.

Kloza said the money spent by U.S. consumers this year will beat the old record of $448 billion in 2008. At the current pace of spending, U.S. consumers will spend $489 billion on gasoline this year.

This may come as a surprise, because 2008 was the year gasoline prices spiked in the summer, with the price of a barrel of crude oil reaching a record $147 per barrel.

The price of gasoline at the pump peaked at $4.114 that summer.

But this year, the price of gasoline has been consistently high. In 2008, after prices peaked, they dropped sharply as the year progressed.

This year, "If you want to blame someone for the high prices, blame South America," Kloza said.

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