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Middle East tensions = pain at the pump

Jan. 17, 2012 at 7:32 AM   |   Comments

WASHINGTON, Jan. 17 (UPI) -- Tensions in the Persian Gulf and modest economic recovery in the United States could influence retail gasoline prices, analysts said.

The U.S. economy is slowly emerging from recession, meaning higher demand for energy products is anticipated for 2012. Tensions in the Middle East, however, could have a greater impact on gasoline prices.

Patrick DeHaan, a petroleum analyst for GasBuddy.com, tells CNN Money that Iranian threats regarding oil-shipping lanes in the Strait of Hormuz are likely to push gasoline prices to close to $4 per gallon in some markets and close to $5 for Chicago and New York by Memorial Day.

But Peter Beutel, an oil analyst at Cameron Hanover, said gasoline prices would likely decline by the end of February because it's unlikely Iran will "go through with any of its threats."

Iran has never closed the key strait despite numerous threats to do so.

Retail gasoline prices, the American Automobile Association says, averaged $3.39 for the United States, up about 30 percent from the same period last year.

Average gasoline prices topped out at $4.11 in the summer of 2008, the dawn of the recession that eventually crippled world markets.

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