Americans can expect growing pain in the pump as rising oil prices – along with growing demand and declining supply – continue to boost US gas station prices. This jump is unlikely to weaken soon after Russia’s war with Ukraine intensifies. , experts say.
The current average national gas price has risen to $ 3.78 a gallon, jumping 20 cents in the last week alone, according to Patrick De Haan, head of oil analysis at GasBuddy. Fuel costs have risen by about a dollar from a year earlier, according to industry figures, a blow to millions of Americans struggling with widespread inflation.
The average for the country now stands at $ 3,781 / gal, which is an incredible 20c / gal compared to a week ago.
– Patrick De Haan @ (@GasBuddyGuy) March 4, 2022
In the most expensive U.S. states, drivers already pay nearly $ 4.50 a gallon, according to price tracker GasBuddy.
De Haan tweeted on February 28 that the average price of gas in some US cities will reach $ 5 a gallon “over the next few weeks.”
San Francisco on Thursday became the first city in the United States with an average gas price above $ 5 per gallon, an increase of more than 30% in one year.
“PRODUCTION: For the first time, a city in the United States has exceeded the average of $ 5 / gal per gallon. San Francisco! ”De Haan tweeted.
INFRINGEMENT: For the first time, a city in the United States has violated the average of $ 5 / gallon per gallon. San Francisco!
– Patrick De Haan @ (@GasBuddyGuy) March 3, 2022
Fostering inflation
Oil prices rose another $ 7 a barrel on Wednesday after an agreement between the United States and other major governments to release 60 million barrels from their national reserves – half of which are U.S. barrels – failed to allay fears about supplies from the attack. Russia against Ukraine.
Oil prices jumped again on Thursday after a new round of US sanctions against Russia’s oil refining sector. The price of Brent crude oil, the international benchmark, rose to nearly $ 120 a barrel – its highest level in 10 years – before falling again to $ 110.46 a barrel, Reuters reported.
The decision, taken by the 31 member states of the International Energy Agency to release oil from emergency stocks, was aimed at “sending a strong message to the oil markets” that there would be no “supply shortages” as a result of the invasion. in Ukraine, but failed to move markets.
Oil traders were not impressed. “Markets have rejected the idea that the 60 million barrels of strategic reserves released will result from the risks of threatened supplies from Russia,” Mizuho Bank’s Tan Bun Hyun said in a report. “Russia is pumping more than that in just six days.”
Russia is a major exporter of crude oil, accounting for about 12% of world supplies. Any disruption to these exports is likely to lead to higher pump prices for consumers almost everywhere, experts said.
“We believe that the war between Russia and Ukraine will increase global and American inflationary pressures by raising oil and gas prices,” said Brian Culton, chief economist at credit rating agency Fitch, in an email.
MoneyWatch: US gas prices rise amid Russian invasion of Ukraine 04:54
Despite the sharp rise in gas prices, which has led to a slowdown in consumer spending, analysts do not yet see the recent rise in oil prices as an imminent threat to the US economic recovery.
“While persistently higher energy prices pose a risk of worsening prospects, we do not see them as enough to thwart the recovery,” Barclays Investment Bank said in a March report.
Fortunately, the shock of energy prices strikes when the US economic recovery is on a relatively solid footing, with many states lifting restrictions on activity as vaccination rates increase and COVID cases declining, and labor markets showing significant resilience. in the face of Delta and Omicron Variants, economists write.
– The Associated Press contributed to this report.
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