The price of oil is poised for another run at $100 a barrel after a global economic rebound sent it surging 34 percent since May.
That could push gasoline prices to $4 a gallon by summer in some parts of the country.
Flying, shipping a package and ordering a pizza all likely would get more expensive this year if that happens and companies pass along higher energy costs. Some economists say rising energy prices will slow economic growth.
The U.S. is the world's largest oil consumer, but prices since spring have been on a roll primarily because of rising demand in developing countries, especially China. China's oil consumption is expected to rise 5 percent next year; that compares with less than 1 percent growth forecast for the U.S.
Benchmark oil for February delivery rose $1.54 on Friday to end the year at $91.38 per barrel on the New York Mercantile Exchange. It reached $92.06 earlier in the day, the highest since Oct. 6, 2008. Nationwide gasoline pump prices now average $3.07 per gallon.
Gasoline expert Fred Rozell predicts that 15 states — including Alaska, Hawaii, Connecticut and Rhode Island — will see gasoline prices top $4 a gallon by Memorial Day. "A dollar more per gallon isn't that much — probably about $750 more per year for each motorist, but there's a psychological aspect to gas prices," he said. "People are going to be up in arms about this."
Higher oil prices have fattened oil company profits. Excluding BP, the four other major investor-owned oil companies posted combined profits of $59.7 billion in the first nine months of the year, a 49 percent increase from the year before. Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp. and Total SA are expected to earn $81 billion for the full year.
The fifth oil giant, BP, was held responsible for the largest offshore oil spill in U.S. history and booked $39.9 billion in charges related to the disaster. Excluding special expenses such as the Gulf of Mexico spill, analysts say the company will still earn $20.2 billion in 2010.
"There's nothing this industry can't survive," Oppenheimer & Co. analyst Fadel Gheit said.