Both oil and gas prices climbed last week after headlines reported an improving U.S. economy, Greek bailout plan, and heightened tensions with Iran. The closing price for a barrel of oil reached a nine-month high and gas prices continue to hit record prices for the month of February. The national average price for a gallon of gas is $3.55, with two states, California and Hawaii, already surpassing $4 a gallon. A barrel of oil closed Friday at $103.24 on the New York Mercantile Exchange--$4.57 more than the week prior.

The Commerce Department reported U.S. contractors broke ground on more homes than originally forecast in January and the Labor Department announced insurance applications for the unemployed fell by 13,000 in the second week of February to 348,000. These two pieces of information were taken as positive indicators the U.S. economy is improving and were enough to help support increased oil prices, despite continued news of lackluster demand.

European leaders are scheduled to meet Monday to discuss the final details of another bailout plan for Greece. This news alone added optimism to the market and increased speculation a resolution will soon be in place to help the indebted country and repair global fuel demand. This comes at a time when tensions with Iran worsen as stricter sanctions are placed on the country to curb their nuclear efforts. Oil prices are expected to increase again this week on concerns Iran will disrupt oil shipments on the Strait of Hormuz and halt exports to French and British companies.

“A couple of weeks ago, it looked as if consumers might see some relief at the pump after oil prices traded below $100 a barrel for several consecutive weeks, but that is no longer the case,” said Jessica Brady, AAA spokeswoman, The Auto Club Group. “The price at the pump continues to increase and break monthly records and it doesn’t look like relief will come anytime soon. Global headlines fueled a bullish market last week and pushed oil prices to a nine-month high.

“Although U.S. fuel demand remains sluggish and it’s evident consumers are doing what they can to cut associated costs, it’s not having a significant impact on the market. Retail gas prices are expected to increase further this week and will likely do so well into March, making $4 a gallon more of a reality come spring.”

The national average price of regular unleaded gasoline is $3.55, a 5 cent increase from last week. Florida’s average of $3.67 and Tennessee’s average of $3.48 both increased 4 cents from last week. Georgia’s average price of $3.54 increased 2 cents from last week, respectively.  

CURRENT AND PAST PRICE AVERAGES

Regular Unleaded Gasoline

                        Current              Week Ago         Month Ago        Year Ago

National:           $3.556              $3.509              $3.382              $3.163

Florida:             $3.672              $3.634              $3.469              $3.147

Georgia:           $3.547              $3.521              $3.384              $3.091

Tennessee:       $3.488             $3.448              $3.273              $3.020