Daily Local News (West Chester, PA)
No relief in sight
Average pump prices in area reach $4.58 per gallon
The average price for a gallon of gas hit record highs on Tuesday in Berks County and nationwide, and industry analysts predict the worst could still be yet to come.
“Gas prices could continue to climb through Memorial Day as summer road-trip season begins and oil prices remain volatile,” GasBuddy reported in its daily blog, forecasting that the long year for motorists will continue.
AAA said the increase primarily is due to higher demand for gas and the high cost of crude oil, which was hovering near $100 a barrel last week and is now closing in on $110.
“Since supply remains tight and the market remains highly volatile, crude prices will likely continue to fluctuate this week, potentially pushing pump prices higher,” AAA reported on its website.
Average pump
the Reading-metro area reached $4.59 per gallon Tuesday, the highest ever recorded, according to AAA.
That’s an increase of $1.50 a gallon from one year ago, when the average was $3.09.
Across Berks the average Tuesday was $4.58, and in surrounding counties the averages were $4.66 in Montgomery and Delaware, $4.64 in Chester, and $4.62 in Lehigh, AAA said.
The national average price of gas Tuesday was $4.36 per gallon, rising above the previous all-time high of $4.35 per gallon set on March 10, GasBuddy said.
The price of diesel also set a new all-time record of $5.53 per gallon Tuesday.
Fuel prices in the U.S. decreased slightly after spiking in March, in part because the Russian invasion of Ukraine continued but simmered, GasBuddy said.
But prices began to rise again over the last few weeks as the odds of the European Union sanctioning Russian oil increased, it said.
Just in the last seven days, the national average rose over 15 cents per gallon.
“Liquid fuels have turned into liquid gold, with prices for gasoline and diesel spiraling out of control with little power to harness them as the imbalance between supply and demand globally continues to widen with each passing day,” GasBuddy said.
“Russia’s oil increasingly remains out of the market, crimping supply while demand rebounds ahead of the summer driving season,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “There’s little, if any, good news about fuel prices heading into summer, and the problem could become worse should we see an above average hurricane season, which could knock out refinery capacity at a time we badly need it as refined product inventories continue to plummet.”
The U.S. Energy Information Administration said prices are rising because demand for gasoline and other petroleum products has been increasing more quickly than production since the third quarter of 2020.
“That imbalance has led to decreases in global supply of crude oil and petroleum products. Those factors are still at play,” said EIA spokesman Chris Higginbotham.
On Tuesday the EIA released its latest energy forecast, predicting U.S. crude oil production will average 11.9 million barrels per day this year and 12.8 million barrels per day in 2023, which would surpass the record average production of 12.3 million barrels per day set in 2019. Still, the EIA expects the crude oil price to remain above $100 per barrel this year.
“A high level of uncertainty remains in our outlooks, but we have consistently forecast that elevated
crude oil prices would help drive record-level annual U.S. oil production levels in 2023,” said EIA Administrator Joe DeCarolis.
“Low global oil inventories coupled with continued high demand for gasoline, diesel, and other petroleum products means that increased production likely won’t have much impact on prices in the short term.”
“Russia’s full-scale invasion of Ukraine has added a lot of uncertainty into the market, and the global market sets the price for crude oil,” Higginbotham said.
“Since the price of crude oil is the predominant factor in gasoline prices, higher oil prices generally lead to higher gasoline prices. Russia’s actions came at a time of already low global inventories of petroleum products, contributing to significant volatility in prices for gasoline, diesel, and other commodities.
“The bottom line is that there is a lot of uncertainty in the market, and that creates an environment for a lot of price volatility.”