(MoneyWatch) The national average price for a gallon of gas jumped another 5 cents in the last week, according to AAA, and is rapidly closing in on the all-time high of $4.11 notched in July 2008.A spike in oil prices is largely to blame for the spike in gas prices, but new data suggests that has little to do with any imbalance in supply and demand. Indeed, global oil production is at all-times highs.
Bob Doll, chief equity strategist at BlackRock (BLK), says roughly half the recent spike in oil prices comes from growing optimism about the prospects for global economic growth, and about half is a result of tension with Iran.
Doll also cites some supply shortfalls in the rising price of oil. But based on February productions figures, supply is soaring even as demand is mostly cooling off. Global supply rose to a record high of 88.6 million barrels per day (mbd) in February, writes economist Ed Yardeni, president of Yardeni Research, citing Oil Market Intelligence figures. See the chart, courtesy of Yardeni Research, below:
OPEC's output rose to a new record high of 37.2 mbd last month, and non-OPEC oil production edged up to 51.4 mbd -- just short of a record 52.1 mbd hit in September 2010.
"While Iran's output has dropped 0.3 mbd over the past three months, Libya's production has rebounded impressively from zero during last summer to 1.3 mbd during February," Yardeni says in a new note to clients.
In other record-breaking oil news, non-OPEC producers in North America put out 9 mbd in February, the highest level in the history of the data going back to 1993. Moreover, Canadian oil output is at a record 3.2 mbd, Yardeni notes, while U.S. oil production is at a level not seen since early 2002.
Meanwhile, global oil demand flattened out in February. Although oil demand rose to a record high for developing economies, it has been trending downwards among the world's richer countries. In Western Europe, the recession has caused oil demand to hit its lowest level since the summer of 1994, Yardeni notes.
Additionally, crude oil stockpiles are well above their historical average going back to 1984, according to Bespoke Investment Group. Although an escalation of tensions with Iran would no doubt boost oil and gas prices, Bespoke says, "at least the market is relatively well prepared."