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Gas prices could soon climb past $3 per gallon

by Jorge Hernandez on December 6, 2010

A Lundberg Survey reviewing approximately 2,500 gas stations on Friday concluded that unless the cost of crude oil drops unexpectedly, gas prices are expected to exceed $3 per gallon in time for Christmas this year.

The average cost of a gallon of unleaded gasoline is now $2.91, up 3.92 cents since the organization's last survey two weeks prior.

"It is once again crude oil at work," survey publisher Trilby Lundberg told CNN. Crude oil went up 9.4 percent over the last two weeks and is currently valued at $89 per barrel, its highest price in over two years, giving gas retailers little choice but to raise prices at the pump to make up for the fall in profit margins.

Wholesale demand rose 0.4 percent, while demand at the pump rose 2.3 percent during Thanksgiving week, reports Bloomberg.

Bloomberg News surveyed 28 analysts to get their takes on the rising prices. Ten of the analysts said crude oil prices would continue to climb, another 10 said they would more or less plateau, and eight predicted that prices would drop, reports the news source.

Oil analyst Tom Kloza forecasts that the average gasoline prices won't reach the $3 mark by the holidays, but may climb to that point in time for spring, right before peak driving season, reports the Associated Press.

Lundberg told Bloomberg that at the current retail level, consumers might expect to see another six to eight cents more per gallon as refiners process the higher costs of crude oil.

"What we're seeing is really just the tip of the iceberg," he added.

Long Island is currently host to the highest gas prices in the continental U.S., with $3.29 for a regular gallon of gasoline. Denver had the lowest price of $2.61 a gallon.

According to CNN, the current prices are 28 cents higher than they were last December.

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