$6 gallon may be regular
The average price of a gallon of gas could hit $6 this summer — while Americans may very well end up paying $2,200 more this year to fill up their tanks, according to new reports.
The warning comes as the cost of a gallon crossed the $6 threshold in California, an indicator that the price is trending upward nationwide — thanks to the Russian invasion of Ukraine and what’s expected to be skyhigh demand as lockdown weary Americans hit the road this summer.
“There is a real risk the price could reach $6-plus a gallon by August,” said Natasha Kaneva, head of global oil and commodities research at JP Morgan, which provided the analysis. “With expectations of strong driving demand, US retail price could surge another 37% by August.”
According to the AAA, the nationwide average price of a gallon of gas rose to a record $4.56 on Wednesday. California leads the country with an average of $6.05 per gallon — topped by $6.27 in Marin County and $6.30 in San Francisco.
US crude oil was trading at $114.07 as of Tuesday, while Brent Crude, the leading global benchmark oil markets, was at $114.86, the US Energy Information Administration reported.
American families are now doling out cash for gasoline at a rate of $5,000 per year — up from $2,800 just a year ago, a new study found. The study, conducted by Yardeni Research, said the cost at the pump has turned into another financial burden for the typical family.
“No wonder the Consumer Price Index is so depressed,” Yardeni said in its study. “The wonder is that retail sales have been so surprisingly strong during April and May.”
The report said compounding the problem is the fact that Americans will likely continue to spend. “When we are happy, we spend money,” the study said. “When we are depressed, we spend even more money!”
Yardeni’s statement is supported by newly released data about the nation’s spending habits. US retail sales rose 0.9% in
April, a solid increase that underscores Americans’ ability to keep ramping up spending even as inflation persists at nearly a 40-year high.
The increase was driven by greater sales of cars, electronics and dining out, the US Commerce Department said Tuesday.
Even adjusting for inflation, which was 0.3% on a monthly basis in April, sales increased.
Meanwhile, the Biden administration has come under fire from the oil and gas industries for policies that have limited available crude supplies.
Last week, the White House said it was canceling three oil and gas leases in the Gulf of Mexico and the Alaskan coast.
“The administration talks about the need for more supply and acts to restrict it,” said Frank Macchiarola, senior vice president of the American Petroleum Institute.