Gas Prices: Crude Reality of Iran Ends Recent Price Freefall

NEW YORK (MainStreet) -- Many U.S. trends start out west -- in California -- and track eastward.

But the exact opposite has been taking place with gasoline prices, which have reversed course and have started rising in the East Coast, Midwest, and Gulf Coast.

Drivers in the Rocky Mountain region were spared, as were consumers along the West Coast, where gasoline prices continued to fall.

Elsewhere, U.S. gas prices are creeping up as crude oil prices edged upward over geopolitical strife in Iran -- on Thursday, news of further sanctions by the U.S. government against Iran were a reason for a bullish oil trade. U.S. crude pushed above $87 per barrel on Friday after the release of bullish Chinese GDP data, capping a three day surge for oil prices after reaching 2012 lows in late June.

Here's a look at U.S. gas prices on a regional basis, with numbers from the U.S. Energy Information Administration.

For the week of July 2 – July 9, the national average was $3.41, up from $3.35 last week, an increase of 0.055%.

On the East Coast, the price of gasoline rose from $3.29 to $3.35, or by 0.06%.

In the Midwest, gas prices increased to $3.44, up from $3.32, the biggest regional increase week over week, at 0.12%.

On the Gulf Coast, gas prices rose moderately from $3.12 to $3.16, or by 0.035%.

In the Rocky Mountain region, gas prices declined by three cents to $3.55, or a decline of 0.034%.       

On the West Coast, the highest average gas price declined from $3.71 to $3.67, or by 0.043%.

The Iran situation continues to trigger upward volatility in crude oil prices, which in turn has bumped up gasoline prices across the U.S., and in other major Western markets.

Any volatility in the Persian Gulf can lead to higher oil and gas prices, as commodities traders load up on what they view as cheaper oil in an environment where supply can be limited due to geopolitical issues.

Iran continues its threat to shut down the Strait of Hormuz, the Gulf transportation channel that moves about 20% of the world’s oil every day.

U.S. and European sanctions against Iran have cut Iran’s oil production by about 188,000 barrels per day in the past six weeks, and the new sanctions should lead to continued pressure on Iranian oil exports, and could lead to higher oil and gas prices, especially if the one-day resurgence in the global economy thanks to U.S. bank earnings and Chinese GDP data on Friday continues to buoy trading sentiment.

Even though gasoline prices did rise through wide swaths of the U.S., the bigger picture is a relatively positive one for American drivers. Since April, the average price of a gallon of gasoline has fallen by five cents, and prices have fallen by 23 cents since July 2011, according to the EIA. In fact, in the release this week of the latest meeting of the Federal Reserve's Open Markets Committee, Fed members cited lower gas prices as a driver for short-term improvement in the economy.

With the Iranian threat looming in the background, and no resolution in sight, expect gas prices to inch up over the next several weeks, unless the commodities market is rocked by major news from Europe sinking into recession or another toxic jobless number in the U.S. in the first week of August.

Those trends would likely send gas prices downward again, but in absence of those developments and if Iran dominates the headlines, gas prices may trend higher than commuters and drivers would like, at least in a perfect world, and especially -- at least based on the latest data -- the further eastward you travel in the U.S.