What happens now with gas prices depends on a variety of factors. Oil prices, a major factor in pump prices, have fallen to their lowest level in about two weeks, while the price of natural gas remained near a 10-year low.
The relief at the pump could be temporary. Experts predict that gasoline prices will rise over the next several weeks. The Oil Price Information Service says the nationwide average could peak at $4.25 per gallon in late April, beating the record high of $4.11 per gallon set in July 2008. That will likely keep gas prices front and center in the presidential campaign and economists will argue their impact on the U.S. economy.
At a White House press conference, President Barack Obama dismissed suggestions by some of his Republican critics that he wants to see gasoline prices rise. No president wants to put more financial strain on American families, especially in an election year, Obama said.
The White House will continue to look for ways to reduce the amount of oil Americans consume, Obama said. The president also asked his attorney general to examine whether speculators were driving up the price of oil.
But "there is no silver bullet" for lowering oil and gas prices, Obama warned.
The government boosted its estimates for average oil and gasoline prices. The Energy Department said the average price of oil should be nearly $106 per barrel this year while gasoline should cost an average of $3.79 per gallon. Government data show Americans paid an average of $3.53 per gallon in 2011.
Gasoline already exceeds $4 per gallon in California, Alaska and Hawaii, which tops at $4.37. It's close to $4 in several other states, including Connecticut, Illinois, Michigan, New York, Oregon and Washington.
In response, U.S. drivers are driving less and buying less gasoline. MasterCard SpendingPulse, which uses credit card purchases to estimate gasoline consumption, said average gasoline demand fell last week by 6.3 percent when compared with a year earlier.
The price of gasoline has tracked the increase in its primary component, crude oil. In the first two months of 2012, oil jumped by an average of 13 percent compared with the same period last year.
Pump prices are almost certain to rise further this spring as refineries switch to making summer fuel blends. This annual changeover temporarily cuts into gasoline supplies just before the summer tourism season.
Oil prices fell Tuesday after Iran agreed to let international nuclear inspectors into its facilities. The standoff between Western powers and Iran over that country's nuclear program had driven oil's rise. The announcement eased concerns about a possible disruption to oil supplies around the globe.
Benchmark West Texas Intermediate crude, which is used to price oil produced in the U.S., fell by $2.02 to end the day at $104.70 per barrel, the lowest price since Feb. 21. Brent crude, which prices foreign oil imported by U.S. refineries, gave up $1.82 to finish at $121.98 per barrel.
The Salt Lake Tribune contributed to this story
Tuesday • $3.48
Week ago • $3.25
Year ago • $3.34
Record high • $4.22 on July 18, 2008
Tuesday • $3.76
Week ago • $3.72
Year ago • $3.51
Record high • $4.11 on July 17, 2008
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