LITTLE ROCK — Gasoline prices stayed high enough for long enough that Americans spent a record $481 billion for the fuel in 2011.
And crude-oil prices have risen in recent weeks on threats by Iran to blockade the Strait of Hormuz, through which, according to the U.S. Energy Information Administration, about 17 percent of the global oil supply passes.
Oil prices jumped above $100 a barrel this week after falling as low as $83 on Oct. 7.
Benchmark crude ended the week at $101.56 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price foreign oil that U.S. refineries import, rose 32 cents to finish at $113.06 per barrel in London.
As a result, the national average price for a gallon of regular gasoline on Friday was $3.35, up about 8 cents from a week ago and about27 cents higher than the average a year earlier, according to AAA.
In Arkansas, a gallon of regular was averaging about $3.19, up from $3.11 a week ago and $2.96 a year ago.
Still, because of waning demand by motorists, the aggregate record may be safe in 2012, according to experts.
“The increase [in the price of gasoline] is absolutely not driven by demand,” Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said in a phone interview Friday. “Prices tend to climb a wall of worry based on global news.”
He thinks that it’s unlikely that tensions in Iran will escalate to a conflict but that they still make people uneasy.
After last year’s revolutions in the Middle East, the European debt crisis and weather events in the U.S., people spent more of their income on gasoline than ever before.
In a report Kloza published Friday, he wrote that Americans spent approximately $481.3 billion on gasoline in 2011, compared with the previous record of $448 billion in 2008, a 7.4 percent increase.
However, Kloza and Phil Flynn, an energy analyst with PFG Best, a commodity brokerage firm, both agree that 2012 won’t likely be as tumultuous as 2011.
“The revolution in Libya, the European credit crisis and flooding on the Mississippi all kept prices higher last year,” Flynn said. “Libyan oil is coming back online and OPEC [Organization of Petroleum Exporting Countries] is exporting more oil than it was last year.”
Flooding along the Mississippi in April and May closed several refineries, which, Flynn said, drove up margins and pushed up the price of gasoline. In Europe a major refiner of oil could not get credit and had to shut down three plants, Flynn said. Those factors combined to support a higher sustained price of gasoline.
Arkansas hit its peak gasoline price of $3.82 on May 13, Mike Right, regional spokesman for AAA, said Friday.
A mix of factors will affect prices this year.
“There are more questions than answers for 2012,” Flynn said.
Prices climbed after the elimination of a 4.5-cent-per gallon subsidy for ethanol on Jan. 1. Most gasoline in the country contains some amount of ethanol.
But demand for gasoline is expected to be lower this year as people become more fuel efficient. Demand in December was down about 4 percent from December 2010, according to Kloza, a trend he expects to continue as people drive less, change driving habits and buy more fuel-efficient automobiles.
On the other hand, two refineries on the East Coast are expected to close this year, which will tighten supply and may create a ripple effect in Arkansas and other states.
And the state could see higher peak prices as summer approaches and refiners switch from winter-grade gasoline to summer-grade gasoline, Kloza said, but national and state prices should see lower lows than last year.
“I don’t expect people to spend as much money on gasoline in 2012,” Kloza said, “barring some major hurricane on the Gulf Coast, a second round of revolutions or other global events that drive up the price.”
Front Section, Pages 1 on 01/07/2012