By Ronald Bailey
A gallon of regular now averages about $3.19 per gallon in the United States. This is up from $2.65 per gallon last February.
There's no mystery as to why gas prices have jumped. It's largely because the price for a barrel of crude has gone up from the 2010 average of about $75 per barrel to hover around $100 per barrel today. Most of the rise is the jittery response of markets to the "Arab Spring" uprisings in Northern Africa and the Middle East.
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In 2008, the world saw oil prices rise to $146 per barrel as global spare production capacity tightened to just 1.5 million barrels per day. With the onset of the global recession, spare production capacity increased to over 6 million barrels per day and the price of oil fell briefly below $30 per barrel.
Today, the Energy Information Administration expects that OPEC surplus production capacity will remain above 4 million barrels per day during the next 2 years. Of course, a lot of this spare capacity is in Saudi Arabia. If the Arab Spring blossoms there, plan to spend a bit more at the pump.