Happy New...gas prices?

GRAND RAPIDS, Mich. (WOOD) - The new year brought a spike in the cost of a gallon of gas in much of the Grand Rapids area after a year that saw record highs and record lows.

Regular unleaded shot up to $1.85 at many stations Thursday.

The price hike comes after oil prices closed up 14 percent on New Year's Eve. That gain was rolled back a bit New Year's Day.

Analyst Patrick DeHaan of thegasgame.com says two factors -- including less supply from the Organization of Petroleum Exporting Countries -- could be at work.

"Further cuts from OPEC leading to a little bit more worry that oil supply is actually going to start to dwindle here," DeHaan told 24 Hour News 8. "And then we have the news out of the Middle East affecting us too."

Wednesday's one-day jump wasn't nearly enough to offset the drop in oil prices in 2008 -- the sharpest decline in 25 years.

That sudden decline in the fall of 2008 played out at the pump.

Data from grandrapidsgasprices.com shows a steady climb toward this summer's high: regular unleaded at more than $4.20 a gallon in spots. But after another spike in September, an actual decrease in demand for oil and fear that demand will go down even further sent gas prices plummeting.

"Nobody predicted this. It's impossible to predict this kind of crash, just like it's impossible to tell exactly what's going to be in the future here this year," DeHaan said.

While predicting future gas prices is an impossible or near-impossible task, it is possible get a handle of what signals we can watch for.

"The biggest factor is going to be OPEC -- how much they try and cut in production and then the economy worldwide, not just in the U.S.," DeHaan said. "China is a huge consumer of oil these days. What's going in China is just as important as what's going on here."

Signs of a deeper recession would likely feed fears that oil demand would drop further; signs of growth in the world economy would do just the opposite.