By Gary Strauss

More drivers than ever could soon be paying $5 for a gallon of gasoline. But the national average, up sharply in recent weeks, is still expected to top out at about $4.

Rising oil prices, lower refining capacity, Middle East tension and speculators are propelling prices. The spike in crude, now at nine-month highs, has driven regular gas to a record February high of $3.65 a gallon — up 42 cents over a year ago.
Motorists along both coasts are paying more: an average $4.20 in California and $3.91 a gallon in New York. Prices along both coasts and other regions could continue to climb far higher. Fallout from a recent fire that’s shuttered a major Washington state refinery could push regional prices up to 20 cents a gallon this weekend. says Patrick DeHaan, an analyst with price tracker gasbuddy.com.
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Taxes, shipping and regional formulations make gas even pricier in some regions.
Florida drivers are paying $5.89 a gallon near Disney World, while gas at some Chicago, San Francisco and Los Angeles stations is up to $4.85.
“I don’t foresee any situation — even a worsening crisis in Iran — that results in $5 a gallon gas nationally,” said Patrick DeHaan of price-tracker gasbuddy.com. “You’re going to see hot spots … that push prices towards $5, but the national range will be $3.75 to $4.15.” We don’t see a scenario for a national average higher than that for any length of time.”
Typically, prices climb through Memorial Day. Increased pain at the pump is already heightening fears that consumer spending will slow, derailing the economic recovery. Prices hit a record $4.11 a gallon in July 2008 and peaked last year at about $3.98.
Hoping to ease griping over a hot button issue in an election year, President Obama said Thursday that there are no quick, easy fixes and ridiculed any Republican plan for “$2 gas.”
“Step one is to drill, and step two is to drill, and step three is to keep drilling,” Obama told a University of Miami crowd. “The American people aren’t stupid. They know that’s not a plan, especially since we’re already drilling. That’s a bumper sticker.”
Speculative frenzy, driven by mounting tensions in Iran, adds $15 to $20 crude oil costs, said Oppenheimer industry analyst Fadel Gheit. Benchmark West Texas Intermediate is now at $107.83 a barrel, its highest since May.
“The biggest fear right now is supply disruption in the Persian Gulf,” Gheit says. “That could send oil prices to all-time highs. But I don’t want to be a fear monger. The probability of that happening is very low.”
Consumers are already reacting to the rise in gas prices. Over the past month, as prices climbed 24 cents a gallon, consumption fell 1.4% through Feb. 17, to about 18 million barrels a day – lowest since April 1997, the Energy Department said.
High prices will continue slicing gas use. “This tempo won’t prevail,” said Tom Kloza of the Oil Price Information Service. “It’s as difficult to sustain $4 gas as it is to hit .400 in baseball.Consumers have too much of an emotional reaction to gas prices above $4.”