Experts: Gas prices could reach $5

GRAND RAPIDS, Mich. (WOOD) - Gasoline prices have never been higher so early in the year.

With averages for a gallon of regular unleaded gas lingering in Grand Rapids around $3.65 Wednesday night, prices are up about 40 cents since late last week. Experts predict they could reach $4.25 by late April, and $5 by summer.

Although gasbuddy.com's Patrick DeHaan doesn't think West Michigan will see gallons selling for $5, on Tuesday he projected that gas would jump to $3.69 a gallon within 48 hours. His estimate proved to be true on Wednesday.

Within the past two years, DeHaan has predicted hikes or drops in gas prices nine times on the air; his predictions were correct seven out of nine.

The surge in gas prices follows an increase in the price of oil.

Higher gas prices could hurt consumer spending and curtail the recent improvement in the economy.

A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. Economists say it's a meaningful amount, especially at a time when growth is only so-so.

"So the perfect storm, the juggernaut that we're facing in rising gas prices, is first the geopolitical issues in the Middle East," Dan Dicker, author of "Oils Endless Bid" said. "Second, speculators and investors who are clearly trying to buy oil and own it. The third would be the number of refineries closing."