As summer travel season approaches, Americans are facing record-high gas prices. In some states, gasoline costs have already topped federal minimum wages. And the impact of Russia’s invasion of Ukraine hasn’t even made a dent yet. In California, the price of gas is already higher than the federal minimum wage. And Oregon is on track to have the highest gasoline prices in the country by June 8 2022.
Although the United States doesn’t import much Russian crude, the war in Ukraine has also raised gas prices. In fact, the war in Ukraine has pushed gasoline prices up by $1.70 a gallon since the start of the year. However, the price of oil depends on global events, which is why producers are hesitant to increase production. In addition, President Joe Biden has recently accused the top oil companies of profiteering.
A recent report shows that oil prices will be at a 13-week high by June. While rising US gasoline demand is one of the primary drivers of these prices, a global supply issue should be a factor as well. The price of crude oil is rising as global demand rises. And it will continue to rise until the price of oil reaches $122 a barrel by June.
The United States does export a tiny portion of its refined gasoline. So it’s possible that tighter sanctions on Russia will decrease its production and increase prices worldwide. Until then, American refiners can make a better profit selling it overseas or to the highest bidder. So what should happen next? A report from the Energy Department on Friday will give investors a sense of how the market is likely to respond.
In recent weeks, the demand for gasoline in the U.S. increased from 8.7 million b/d to 9.2 million b/d. However, the amount of gasoline in the country decreased by 4.8 million bbl. Last week’s decline in gasoline supply will cause pump prices to rise. With this tight supply and the unpredictable price of crude oil, we could see more gasoline prices soon.
Last week’s decline in the price of crude oil was mostly due to global concerns over the possibility of a recession, which could lower the demand for oil and cause the prices to fall. The EIA reported that total domestic crude oil stocks had increased by 8.2 million barrels compared to last year. If this trend continues, crude prices could continue to rise this week.
Since mid-March, gas prices have fallen by up to eight cents in many states. In Texas and Ohio, gas prices have dropped more than ten cents since then. That means that consumers are paying less for gasoline, which is good news for consumers. However, this decrease in gas prices has not yet translated into lower prices for consumers. A gallon of gas still costs $1.50 more than a year ago.