Gasoline prices have reached $2.75, as the price of crude oil has surged. The price of an average gallon of regular nationwide was $2.60 just a month ago. Most evidence shows that the number should go higher in the weeks ahead. Summer driving will be a critical factor in the rise.
Uneven gas prices have hurt some states more than others. The average price of a gallon of regular in California rose to $3.70 recently. In Alaska, Hawaii and Nevada the number hit $3.30, and in Oregon and Utah $3.03. The average price of a gallon of premium is California has hit $3.91. That number could easily breach $4 on the upside, taking the price of gas above the $4 level for the first time in over three years.
Most of the states with high gas prices have one or two things in common. The first is high gasoline taxes and fees. The other is long distances from the largest refineries. Neither of those factors will change for years. So, if oil prices rise another 10%, $4 gas could become a norm in the states that already have high prices.
ALSO READ: 5 Key Analyst Stock Picks With 50% to 100% Upside (or Even More)
The price of a barrel of oil moved above $60 early this month. After falling back slightly, it reached $60 again last week. The number is up from a 52-week low of $47.46, so the increase is 26%, and contraction of fracking, mostly in the Dakotas, may dampen supply further.
The AAA has posted analysis that indicates crude may rise for a number of reasons:
Volatility is expected to continue to characterize global oil prices, with a number of variables potentially impacting the sensitive balance between supply and demand. Geopolitical tensions in the Middle East are persisting, largely due to violence by the so-called Islamic State in Iraq and Syria, which adds a level of risk to regional oil production. At the same time, the strength of the U.S. dollar is improving on the heels of improved inflation data. A stronger dollar makes crude oil relatively more expensive for those overseas, which puts downward pressure on prices. Both factors are likely to influence the global price in the near term and market watchers are closely monitoring the ultimate impact on the global price of crude
Demand for gas between now and Labor Day will hit the highest level of the year. That, in and of itself, will press the price of gasoline up.
ALSO READ: 9 States Running Out of Water
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
