A day after the Americans faced the the highest costs they have ever seen at the pump, gas prices rose once again and set a new all-time high on Wednesday, according to AAA. The national average is now at $ 4.25 a gallon, the highest since Tuesday’s record of $ 4.17 a gallon.
Prior to this week’s record prices, the previous high was $ 4.10 in July 2008, according to Bloomberg. (Adjusted for inflation, still the maximum for fuel prices).
But gas prices vary widely across the country, with California drivers facing higher costs with an average Wednesday price of $ 5.57 per gallon. Meanwhile, drivers in some southern and midwestern states still pay less than $ 4 per gallon for gasoline, such as Oklahoma, where the average per gallon is about $ 3.79.
Gas prices have risen due to Russia’s war in Ukraine, which has raised concerns that the conflict could disrupt global oil supplies. But the cost of gasoline was rising even before the conflict, which began late last month. As the nation recovered from the pandemic and confinements eased, Americans went out more, to stores, back to work, increasing gas consumption, and raising prices.
Rising gasoline prices have contributed to several months of sharp inflation, which is now one of the main concerns of the American consumer.
Nearly one in three people is downsizing, and most cite higher gasoline prices as a reason, according to a new Morning Consult survey.
Why is gas so expensive?
U.S. gas prices, which fell to an average of $ 1.94 per gallon in April 2020 as COVID-19[feminine[feminine The pandemic caused blockades, began to rise sharply in the fall of that year as the US economy recovered. By December 2021, gas had reached $ 3.40 a gallon, adding to inflationary pressures that affected everything from groceries to rents.
But oil and gas costs have continued to rise amid Russia’s war in Ukraine, and prices have skyrocketed after Russia launched a major invasion on February 24. On Tuesday, President Biden announced a US ban on oil and gas imports into Russiapointing to the main source of income of Russian President Vladimir Putin, as Russian forces continue to hit Ukrainian cities.
Brent crude, the benchmark for oil prices, rose about 5% on Tuesday to more than $ 129 a barrel.
“The military conflict between Russia and Ukraine has pushed oil prices up by more than 30% in the last seven days,” UBS investment bank analysts said in a report. “This is the second largest one-week increase in crude oil in the last 30 years, driven by fears of a potential embargo on Russian oil supplies, which would have far-reaching implications for producers, consumers and oil markets.”
When will gas prices go down?
Wall Street analysts predict that petrol prices may remain high in the foreseeable future, but on Wednesday there was some sign of relief: the reference Brent crude price fell 4.5% to about $ 122 a barrel.
This is “great news,” Patrick De Haan of GasBuddy said in a tweet on Wednesday morning.
However, he added, it is not certain that consumers will see relief in the bomb: “Oil could go down this morning, but the markets are open, so that could change, and if it stays until the liquidation of this “In the afternoon, the stations will do so. See a small drop in the cost of replacement.”
In other words, he said, “It will slow the rise, but they haven’t even surpassed the full increases, so it won’t go down.”
what I’m saying here won’t probably come true at the pump, but it will slow down the climb, but that’s a good sign.
– Patrick De Haan @️📊 (@GasBuddyGuy) March 9, 2022
Gas prices could fall by the end of the year, according to David Kelly, chief global strategist at JPMorgan Funds in a research note. That would depend on higher shale oil production in the United States and higher production by OPEC members, among other advances, he noted.
And consumers could change their behavior due to high prices, such as reducing driving or switching to electric vehicles, which would reduce gas demand. This, in turn, could drive down prices.
“Because of all this, it is very possible that oil prices will rise in the short term, but then fade in the coming months,” Kelly said.
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- Inflation
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