Retail gasoline prices, already at the highest levels on average since July 2008, are likely to continue to climb this month as refinery and pipeline problems overshadow weakness in U.S. consumer demand.
On Wednesday night, a fire broke out at Exxon's Baytown, Texas refinery, a 584,000 barrel per day facility that is the largest operating refinery in the U.S.
Exxon said there may be "some impacts to production" from the fire, but the plant will resume normal operations. A partial shutdown of the Colonial Pipeline, the nation's largest oil product pipeline, also contributed to supplies fears, as it impacted the portion of the line carrying gasoline from Atlanta to Nashville.
"It will only take another refinery issue and a bit more of geopolitical noise to have the first U.S. election at a US average gasoline price of $4 a gallon," says energy analyst Olivier Jakob of Petromatrix. (Read More: Gas Prices Jump Up to 20 Cents Overnight in California)
The national average for regular unleaded is now at $3.79 a gallon, basically on par with where pump prices were last Friday.
Yet that masks the volatility in the gasoline futures , and especially some wholesale markets. Gasoline futures prices dropped 30 cents after the expiration of the previous month's contract, reflecting the seasonal shift among many refiners from summer-grade gasoline to a cheaper winter-blend.
On Wednesday morning, the EIA reported a sharp drop in gasoline demand versus a year ago — leading futures to fall to the low of the week. But prices quickly recovered after the fire at the Exxon Baytown refinery. (Read More: Fire Hits Diesel Hydrotreater at Exxon Baytown Refinery)
And then there are pockets of the country where the supply crunch is more pronounced.
The cash market for gasoline — which sets the price for retail gasoline prices that consumers pay — in California soared $1.15 cents in 9 days to $4.24 a gallon on Thursday.
The rapid increase came after a Chevron refinery fire and power failure at an Exxon refinery in the state exacerbated the condition of already low gasoline supplies. Retail gasoline prices in California are usually the highest in the nation.
The spike this week "is like something out of the Wild, Wild West," says OPIS analyst Tom Kloza. The state-wide average in California jumped 17 cents overnight, a 4 percent surge spurred by refinery issues, tight supplies of the state-mandated special blend of gasoline required.
In other states, such as Mississippi, the statewide average is $3.52. Here in New York, gasoline averages at $4.13 per gallon. California tops the list with an average of $4.49 per gallon.
Historically weak demand is the main theme for gasoline prices at the end of the year. The final three months of the year are the lowest for gasoline demand and prices come off, says CNBC contributor and trader Anthony Grisanti of GRZ Energy. "But we could be paying the highest gasoline price for the fourth quarter than we've ever paid before."
-By CNBC's Sharon Epperson