Thanks to $100+ crude oil, prices at the pump have eclipsed $4.00 per gallon in six states. This weekend New York became the latest, but probably not the last, state to break the $4.00 barrier joining Alaska, California, Connecticut, Hawaii and Illinois. The national average now stands at $3.83, 29 cents higher than a month ago and nearly $1.00 more expensive than it was this time last year.
Much like the summer of 2008, when oil spiked to $147 a gallon and national gas prices topped out at $4.11, recent surveys suggest drivers are buying less fuel as a result of price increases. Furthermore, higher gas prices are taking $100 billion out of consumers pockets, according to a Fortune article, citing Goldman Sachs economist Andrew Tilton. "A key reason for concern is the sharp rise in gasoline prices so far in 2011 — nearly 70 cents per gallon — which is siphoning off household income at a run rate equivalent to $100 billion per year." That certainly won't help with the economic recovery. The good news, if they're right, Goldman expects commodity prices to come down later this year.
Meanwhile, in the short-term, prices aren't likely to plummet. Citing an "over-supply" of oil on world markets, Saudi Arabia cut their oil production in March; that's likely to create some support for oil prices and means Americans will continue to pay up at the pump.
How high do gas prices have to go before you buy less fuel?