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The Honolulu Advertiser
Posted on: Monday, June 9, 2008

U.S. gas average passes $4 gallon

By John Waggoner
USA Today

Hawaii news photo - The Honolulu Advertiser

Many parts of the U.S., including Hawai'i and California, are paying well above $4 a gallon.

RICHAD VOGEL | Associated Press

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Average U.S. gasoline prices shot above $4 a gallon for the first time yesterday, and drivers will be shelling out even more for gas this week.

The national average price of a gallon of gas hit $4.005 yesterday, up from $3.988 Saturday, and $3.105 a year ago, according to the American Automobile Association.

But that's just the average. Drivers in California are paying an average $4.44 a gallon, said AAA. In Visalia, Calif., a gallon of regular unleaded averaged $4.50.

Hawai'i's statewide average was $4.20 a gallon yesterday. Honolulu prices averaged $4.10, according to AAA.

MISSOURI HAD THE LOWEST AVERAGE PRICE, AT $3.80

A gallon of diesel averaged $4.762, vs. $2.902 a year ago. Premium gas averaged $4.80 , vs. $3.605 last year. In Honolulu, diesel averaged $5.05 and premium averaged $4.42.

The rise in gas prices follows an unexpected $10.75 jump in the price of oil Friday, to a record close of $138.54 a barrel. It had spiked up as high as $139.12. Sending oil soaring:

Israel's transportation minister said Friday that an attack on Iran was "unavoidable." Iran produces 4 million barrels of oil a day, and is the world's second-largest producer, behind Saudi Arabia .

The U.S. dollar fell. A euro cost $1.5768 Friday, vs. $1.5593 on Thursday. Oil is priced in dollars, and when the dollar falls in value, oil prices rise.

Investment bank Morgan Stanley predicted oil prices would hit $150 by July.

"I think anyone who says they are not shocked would be being untruthful," said Fred Fromm, manager of Franklin Natural Resources fund.

"I still worry about late July and August when there will be plenty of hurricane hype," Tom Kloza, analyst at Oil Price Information Service, said last week. Forecasts of hurricanes send prices up because energy operations in the Gulf of Mexico could be slammed. After Hurricane Katrina in 2005, prices rose to an average of about $3.06, a record at the time.