Driving to get more expensive this summer
Rise in oil futures and record demand combine to push up costs at the pump
Drivers will pay the highest gasoline prices this summer since 2014 as record demand combines with higher crude prices to raise costs, according to a government forecast.
Drivers will pay the highest gasoline prices this summer since 2014 as record demand combines with higher crude prices to raise costs, according to a government forecast.
The U.S. Department of Energy projects gasoline will average $2.74 a gallon, topping last summer's average by 32 cents.
The increase is anticipated to again boost average fuel spending for the second consecutive year since the plunge in crude prices in late 2014. The Energy Department expects that U.S. households will spend an additional $190 on gasoline this year, about 9 percent more than last year.
Gasoline prices follow the price of crude oil, which is about $12 a barrel higher than a year ago. Oil prices surged Tuesday, jumping more than $2 a barrel, or 3 percent, to settle at $65.51 a barrel in New York as fears of a trade war between the U.S. and China eased and Saudi Arabia was reported to be seeking $80 a barrel oil as it leads efforts
among OPEC and its allies to curb production.
The rally reversed the pessimism that has pervaded to stock and commodity markets in recent weeks.
Chinese President Xi Jinping struck a conciliatory tone in a closely watched speech, calling for dialogue to solve trade disputes and pledging a new phase of “opening up.”
Strong demand is also supporting prices. Last week, the Energy Department reported that U.S. consumption of petroleum products was 7 percent higher than the same period a year ago. Fuel consumption this summer expected to tick upward to 9.6 million barrels of gasoline per day this summer, an increase of about 20,000 barrels from last summer's record.
The price of a gallon of regular unleaded in the Houston area averaged $2.43 a gallon last week, according to GasBuddy, which tracks fuel prices nationwide. That's 21.6 cents more than it cost at this time last year.
Nationally, prices averaged $2.65 a gallon, 27 cents higher than last year.