Oil Rises Above $92, Higher Gas Prices Predicted

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The price of oil rose above $92 on Monday and some analysts are predicting it will keep climbing. Such a spike could drive gas prices up to $4 a gallon or even higher.

Last week, John Hofmeister, the former president of Shell Oil, predicted much higher gas prices for the U.S.

"By November 2012, if we stay on the path that we're on, just in time for the presidential election, American voters will pay $5 a gallon for gasoline, he said."

Yet, the fact that gas prices are already rising has already caused dismay among consumers.

"This is sort of unprecedented in the U.S. to see a spike at this time of the year," said Paul Seredynski, executive director of Edmunds.com.

The recent leap in the price of gasoline to more than $3 a gallon for regular unleaded puts it 76 percent higher than just two years ago.

There are signs of economic recovery in the U.S., including the much needed return of robust consumer spending. However, some analysts say persistent higher gas prices could put the brakes on any economic turnaround.

"It's almost like a prozac for the country when gas prices are low," Seredynski said. "People tend to feel better about the economy. They feel more mobile. They feel they have more additional income to spend on other things."

The signs aren't good for gas prices to fall anytime soon. The supply isn't going up. But the demand is -- by many billions of gallons. Tens of millions of new cars in Asia are adding more permanent new sources of gasoline demands on the world's oil industry.

"It's like we're watching a hurricane coming at us and not doing anything about it," Hofmeister said.

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Lorie Johnson

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