Oil prices fell from a two-year high on Monday after China announced its second interest rate hike since October to control inflation. Oil prices fell on concerns over a slowdown in China’s booming economy. China is now the world’s second largest consumer of oil, next to the United States, and its rate of oil usage is growing faster than that of the US.
However, it is a different story for gasoline prices, which continued to climb higher. Nationwide, the average price for a gallon of a gasoline rose to $3.052. A year earlier, pump prices nationally were 44.5 cents lower. Tom Kloza – the chief oil analyst for the energy information firm, Oil Price Information Service – said “We will end the year with the highest prices ever for this week.”
Year-end retail gasoline were last this high in 2007, when the national average was $3.053 on December 31. Mr. Kloza went on to say that he expects a break for consumers in prices at the pump after the new year. But he cautioned that, between March and May, gasoline prices will range from $3.25 to $3.75 nationally, with the higher prices being seen in California.
He believes that we will not see the pattern repeat the 2008 pattern. By July 7, 2008, the national average for a gallon of gasoline at the retail level had soared to $4.114. As Mr. Kloza said, “In 2008, we lost our collective heads, from Wall Street to Main Street. That will not happen again. Well, I hope not!”