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for the first time A gallon of regular gas now costs an average of $5 nationwide, according to AAA’s Saturday reading.
The record is hardly a surprise. gas prices have been continues to grow for the past eight weeks, and this latest milestone marks the 15th straight day that AAA readings have hit a record value, and the 32nd time in the past 33 days.
The national average was $4.07 when the current round of price hikes began on April 15. The current price reading from OPIS is up 23% in less than two months.
And rising petrol prices are doing more than causing pain at the pump for drivers. They are a major factor in the pace of prices consumers pay for a full range of goods and services, growing at the fastest rate in 40 years. government inflation report Friday.
cause of inflation consumer confidence To hit a record low on Friday, according to a University of Michigan survey. is concerned that federal Reserve Will be sent to America to fight inflation stock fall in recent months, wipe out billions in household money.
While the national average of $5 is new, $5 gas has become unpleasantly common in much of the country.
Data from OPIS, which collects readings from the 130,000 U.S. gas stations used to compile the AAA average, showed that 32% of stations nationwide, about one in every three, already had $$ in readings on Fridays. 5 per gallon. And about 10% of stations nationwide are charging more than $5.75 a gallon.
The statewide average was $5 per gallon or more in 21 states and Washington DC in Saturday’s reading.
And gas prices aren’t likely to stop there. with summer travel season On-going, gasoline demand, with Russian oil shipments cut due to the war in Ukraine, is driving up oil prices in global markets.
The US national average for gasoline could be closer to $6 later this summer, according to Tom Kloza, global head of energy analysis for OPIS.
“Anything goes from June 20 to Labor Day,” Kloza said earlier this week of gas demand as people took to the street for the long-awaited getaway. “Come hell or high gas prices, people are going to take vacations.”
The highest statewide average has long been in California, where the average was $6.43 a gallon in Saturday’s reading. But the pain of higher prices is being felt across the country, not just in California or other high-priced states.
That’s partly because the cheapest price wasn’t all that cheap—the $4.47 per gallon average price in Georgia makes it the cheapest statewide average. Less than 300 of the 130,000 gas stations nationwide were charging $4.25 per gallon or less in Friday’s reading from OPIS. For comparison, before the sharp rise in prices earlier this year, the record national average for gas was $4.11, set in July 2008.
And even in some states with cheaper gas prices, such as Mississippi, lower average wages mean that There drivers have to work longer hours To earn the money needed to fill up their tanks compared to drivers in some high-priced gas states like Washington.
There are some early signs that people are starting to cut back on their driving due to higher prices, but this is still a slight drop.
According to OPIS, the number of gallons pumped at stations in the last week of May was down about 5% from the same week a year ago, although gas prices have risen by more than 50% since then. According to mobility research firm Inrix, the number of US trips by car has fallen by about 5% since the beginning of May, although those trips are still up about 5% since the start of the year.
The main concern is that consumers will cut back on other spending to continue driving, which could further dent an economy already showing signs of recession.
In addition to strong demand for gasoline, there is also a supply problem that is driving up the prices of both oil and gasoline. Russia’s invasion of Ukraine, since then the sanctions imposed on Russia in the United States and Europe is a major factor, as Russia was one of the world’s major oil exporters. But this is only part of the reason.
Oil is a commodity traded in global markets. The United States has never imported significant amounts of oil from Russia, but Europe has traditionally relied on Russian exports. European Union’s recent Decision to ban oil tanker shipments sent from russia rise in oil prices globally.
The price of a barrel of crude oil closed above $120 a barrel on Friday, down from less than $100 a month ago. Goldman Sachs recently predicted The average price for a barrel of Brent crude, the benchmark used for trading oil in Europe, will be $140 a barrel between July and September, up from $125 a barrel before that.
Beyond Russia’s withdrawal from the global market, other factors are limiting supply. OPEC and its allies have sharply cut oil production as demand for oil crashed in the early months of the pandemic, as most of the world’s businesses closed and people stayed closer to home. global oil futures Briefly traded in negative territory Due to lack of space to store the glut of oil. Some oil producing countries cut production in an attempt to support prices, and some of them production is back online But that’s not all.
US oil production and refining capacity has also not fully recovered to pre-pandemic levels. And because prices are even higher in Europe, some American and Canadian refineries that normally supply gas to the US market are exporting gasoline to Europe.
Many oil companies have been slow to increase production despite the high price, instead using those rising profits to buy back their own stock in an effort to raise their stock price. ExxonMobi has announced that it intends to repurchase $30 billion of its stock, which exceeds its total capital expenditure budget for the year.
— CNN’s Matt Egan and Michelle Watson contributed to this report.