Fuel reaches 18-month high; prices could dampen economic recovery

(NBC) - The average nationwide price of a gallon of gas hit $2.86 this week, an 80-cent increase over the past year.

"If we continue to climb like we're doing here, for the price of crude oil, we could likely get to that $4 mark," said CNBC's Sharon Epperson.

Analysts call it a perfect storm of factors: more drivers on the road in warmer weather, refineries switching fuel blends for the summer and what could be the biggest driver, futures traders betting on a growing economy.

"People who are trading the oil futures in the speculation market are rallying and predicting that the economy is going to increase tremendously," said former Associate Deputy Secretary of Energy Randa Fahmy Hudome.

They've bid up the price of oil to a five-month high.

"That could take the wind out of this economic recovery that we've seen," Epperson said. "That could starve the economic recovery."

It means Americans spending more on fuel would have less for other things. Companies facing less demand, would have less reason to hire.

"The lesson of all this is it's imperative we learn to use less gasoline, drive more efficient vehicles and ultimately produce more domestic oil, so its not such a drag on our economy," said Peter Morici, an economist from the University of Maryland.

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