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Gas, Oil Prices Start 2012 on an Upswing

January 3, 2012

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Diesel prices are down as far as the national average, but are up in some regions of the country, and gasoline and crude oil prices both rose Tuesday.


According to weekly figures from the U.S. Department of Energy, the average price of a gallon of diesel as of Jan. 2 was $3.783, down almost a penny from last week. Yet prices were up slightly in the East Coast regions and in California.

The national average price of diesel is 45.2 cents higher than it was a year ago.

Gasoline prices were up more consistently, with the national average up 4.1 cents per gallon (22.9 cents higher than a year ago), and prices up in all regions except the Rocky Mountain region.

Oil prices jumped Tuesday as tensions grew over Persian Gulf oil shipments. February crude futures settled $4.13 higher at $102.96/barrel on the New York Mercantile Exchange.

Commodity prices tend to rise at the beginning of the year anyway, as investors start the year with a fresh round of trading. But driving prices higher than usual were worries that Iran might try to close the Strait of Hormuz to oil tankers if Western nations impose new sanctions in response to its nuclear program. One-sixth of the world's oil shipments pass through the waterway.

Strong economic data from the U.S. and China also helped push oil prices higher. The Institute for Supply Management's index of manufacturing activity rose in December to 53.9 from 52.7 in November, better than the expected reading of 53.2.

In addition, construction spending rose 1.2% in November -- its highest level since June 2010, according to the Commerce Department.

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