Gas prices hit their highest February level ever this year, rising to just over $4 per gallon. (Prices in California are usually $1 a gallon higher.)
The graph charts the February price per gallon since 2006. The horizontal axis measures time, the vertical axis is the price of gasoline per gallon, ranging from $1.50 to $4.00.
Prices first surged in 2008, when they reached $3.40 per gallon after hovering below $2.50 in the previous two years. They fell back significantly in 2009 but have climbed steadily ever since. InvestingChannel explains it in the following way:
Gasoline futures have ripped higher as unplanned maintenance, refinery closings, and rising crude oil prices (seemingly more central bank liquidity-driven than middle-east tensions) have impacted wholesale price expectations (and thus retail). The 44c rise is the fastest in four years and the year-to-date surge over 12% (outpacing stocks) is almost four times faster than average. What is more worrisome is the fact that seasonally the next month or two are when the biggest price spikes occur - which coupled with the tax-hike drag, will inevitably eat into people's spending habits and sentiment.
Just about everybody else has an explanation as well. One thing they all agree on - domestic oil production is not the problem. The Bakken Shale has raised domestic output 25 percent over the past two years. Instead, the problem seems to lie with the inflationary policies of the Federal Reserve. As the Wall Street Journal puts it: “If the Fed is going to claim credit for rising stock prices and rising housing prices, it has to take credit for rising commodity prices as well.”