The average price of US gas reached $ 5 for the first time

The record is not a surprise. Gas prices were Rising steadily For the past eight weeks, this latest milestone marks the 15th day that AAA Reading has reached a record price and the 32nd in the last 33 days.

The national average was $ 4.07 when the current price hike began on April 15. The current price of OPIS represents a 23% increase in two months.

Rising petrol prices are doing more than just causing pump pain for drivers. They are a key factor in the pace at which consumers are paying the full range of goods and services that have been rising the fastest in 40 years. Government Inflation Report Friday.

Although the $ 5 national average is new, $ 5 gas has become undesirablely common in most parts of the country.

Data from OPIS, which collects measurements from 130,000 US gas stations used to compile AAA averages, shows that almost 32% of stations nationwide charge more than $ 5 per gallon on Friday measurements. And about 10% of stations across the country charge more than $ 5.75 a gallon.

The statewide average was $ 5 or more per gallon in 21 states and Washington DC on Saturday reading.

$ 6 gas may be next

And gas prices are unlikely to stand there. With Summer travel time Russia’s oil exports have been cut off due to the war in Ukraine, and demand for petrol and rising oil prices in world markets.

According to Tom Closa, global head of energy analysis at OPIS, the U.S. national average for petrol will be close to $ 6 later this summer.

“Nothing will happen from June 20 until Labor Day,” Closa said earlier this week about the need for gas, as people came on the road for long-awaited trips. “Come to hell or higher gas prices, people are going on vacation.”

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The highs state average has long been in California, where it averaged $ 6.43 a gallon on Saturday’s readings. But not only in California or other more expensive states, the pain of high prices is felt across the country.

Cheap gas is hard to find

That’s because cheap is not so cheap – the average price in Georgia is $ 4.47 per gallon, giving the cheapest average across the state. Fewer than 300 of the 130,000 gas stations across the country charge OPIS $ 4.25 or less per gallon on Friday reading. For comparison purposes, the national average for gas before the price increase earlier this year was $ 4.11, set in July 2008.

Even in some states with cheaper gas prices, such as Mississippi, that means lower average wages Motorists have to work longer hours To earn enough money to fill their tank than drivers in more expensive gas states like Washington.

There are some early signs that people are starting to reduce their driving by rising prices, but it’s still a small decline.

The number of gallons pumped into stations in the last week of May is down about 5% from the same week a year ago, even as gas prices have risen more than 50%, according to OPIS. According to mobility research firm Inrix, the number of trips to the U.S. by car has fallen by about 5% since the beginning of May, although those trips have increased by another 5% since the beginning of the year.

The main concern is that consumers will cut other costs to drive a vehicle that could push the economy, which is already showing signs of weakness, into recession.

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Many reasons for the record price

Beyond the strong demand for petrol, there is also the supply problem that raises the prices of both oil and petrol. Russia’s invasion of Ukraine and subsequent sanctions on Russia in the United States and Europe have been a major factor because Russia is one of the world’s leading oil exporters. But that is only part of the reason.

Oil is a commodity traded in global markets. The United States has never imported significant amounts of oil from Russia, but Europe has traditionally relied on Russian exports. The latest in the EU Decision to ban oil tanker exports Shipped from Russia Oil prices are rising Worldwide.
The price of a barrel of crude oil ended above $ 120 a barrel on Friday, down from $ 100 a month ago. Goldman Sachs recently predicted The average price of a barrel of Brent crude oil, the standard for oil traded in Europe, was $ 140 a barrel between July and September, at $ 125 a barrel.
Other factors besides Russia’s withdrawal from the global market restrict supply. OPEC and its allies have slashed oil production as oil demand fell in the early months of the epidemic, shutting down most of the world’s businesses and keeping people close to home. The future of global oil Briefly traded in the negative area Due to lack of space to store oil. Some oil-producing countries cut production in an effort to support prices, and some Production is back online But that’s not all.

U.S. oil production and refining capacity have not fully returned to pre-epidemic levels. As prices continue to rise in Europe, some U.S. and Canadian refineries generally supply gas to the U.S. market, which exports gasoline to Europe.

Many oil companies are slow to increase production despite the high price at which oil can be obtained, but instead repurchase their own shares in an attempt to use that high profit to raise their share price. ExxonMobi (XOM)Has announced that it wants to repurchase $ 30 billion in its shares, exceeding its total capital expenditure budget for this year.

– Matt Egan and Michelle Watson of CNN contributed to this report.

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