Gas prices: Brace for another surge

NEW YORK (CNNMoney) — Gas prices are up nearly 6 cents this week and analysts say this is just the beginning, as oil prices soar on political strife in North Africa and the Middle East.

“We’ve got another 10 to 15 cents of catching up to do in the next few days,” said Tom Kloza, chief oil analyst at the Oil Price Information Service, which compiles gas prices data for motorist group AAA.

The national average price of a gallon of gasoline rose 3.4 cents overnight to $3.228, according to AAA. Gas prices have jumped 4.2% from the start of February and Kloza said the national average could hit $3.35 a gallon as early as this weekend.

Drivers in Hawaii are paying the most, at an average of $3.75 a gallon. And according to gas tracker gasbuddy.com, some gas stations in Los Angeles and San Diego were already charging more than $4 a gallon on Thursday.

The increase comes as prices for crude oil, the main ingredient in gasoline, have spiked on the political upheaval roiling North Africa and the Middle East.

The benchmark U.S. oil price hit $100 a barrel on Wednesday, and was holding near that level on Thursday. Brent crude, the main oil contract in Europe, rose to a high above $118 a barrel on Thursday.

That could spell even higher gas prices for drivers in the United States.

For every $1 increase in the price of oil, you can typically expect a corresponding 2.5 cent increase in the price of gas, according Moody’s Analytics economist Chris Lafakis.

Oil prices have already jumped $12 this week, which means that drivers can “expect gas prices to be 37 cents higher” in the coming days, he said.

The rise in gas prices could have severe consequences for the U.S. economy, which has rebounded from the recession of 2008-2009 but remains relatively fragile.

Lafakis said that, in general, every $1 increase in the price of oil costs consumers $1 billion over the course of a year.

Last year, oil prices averaged $79.6 a barrel. So far this year, prices are averaging about $89 a barrel. Lafakis said that if prices average out at $90 a barrel in 2011, the money that consumers would get as a result of the payroll tax holiday enacted late last year would be cut by 25%.

While a sustained spike in energy prices is definitely a “threat” to the economic recovery, “we should be able to skirt a second recession or significant slow down,” said Lafakis.

Libya is the first oil exporting nation to be impacted by the protest movement that has toppled regimes in Tunisia and Egypt this year. Analysts expect oil prices to move even higher if the turmoil spreads east to Algeria, or migrates to the Middle East, where some worry that Saudi Arabia could be impacted. 

First Published: February 24, 2011: 12:05 PM ET