For the first time in history!U.S. gasoline prices “break 5”, analysts expect to rise to $6 this summer
Financial Associated Press, June 13 (Editor Liu Rui) On Sunday, Eastern Time, the American Automobile Association (AAA) released data that the average gasoline price in the United States rose to $5.004 on Saturday, breaking the $5 mark for the first time in history.
This data is not surprising. U.S. gasoline prices have been rising steadily for the past eight weeks. According to AAA statistics, U.S. gasoline prices have hit record highs for 15 consecutive days.
When the current round of U.S. gasoline price hikes began on April 15, the U.S. average price was $4.07. In less than two months, U.S. gasoline prices have risen by 23%.
The survey data also showed that in 21 states, including Washington, D.C., the statewide average on Saturday was more than $5 a gallon. About 10 percent of gas stations in the U.S. already cost more than $5.75 a gallon.
Average gasoline prices in California are consistently among the highest in the United States. Data on Saturday showed the average gas price in California was $6.43 a gallon.
Oil prices still difficult to cool in the short term
After rising above the $5 mark, U.S. gasoline prices are unlikely to stop there. Analysts have already predicted that U.S. oil prices may look further towards the $6 mark.
U.S. gasoline demand is expected to continue to heat up as the U.S. summer travel season begins. At the same time, the Russian-Ukrainian war is still not over, and international crude oil prices are skyrocketing. In addition, domestic refineries are difficult to restart in the short term following a large number of shutdowns, and it is difficult to increase gasoline production.
The national average gasoline price might be close to $6 later this summer, said Tom Kloza, head of global energy analysis at oil price consultancy OPIS.
“Anything can happen between June 20 and Labor Day (September 5),” Kloza said of gasoline demand. “No matter how high oil prices are, people are going to go on vacation.”
Mark Williams, head of research at energy consultancy Wood Mackenzie, estimates that 3 million barrels per day of refining capacity will be shut down in 2020 and 2021, and once a refinery shuts down, it will be difficult to restart. And, despite the current high margins in the refining industry, many investors remain cautious regarding investing in such polluting industries.
“The market is definitely going to be tight over the next two years,” Williams said. “We expect this high oil price environment is likely to continue into the middle of next year.”