Are we headed back to $3 per gallon gas?
A vehicle pulls into a petrol station in Los Angeles, California on April 21, 2020, a day after oil prices dropped to below zero as the oil industry suffers steep falls in benchmark crudes due to the ongoing global coronavirus pandemic. – US oil prices surged on April 22 after falling below zero for the first time at the start of the week as markets drown in crude due to a virus-triggered collapse in demand. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)
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(NEXSTAR) — It may feel like gas prices are high right now, but come summer you may be wishing the winter fuel prices would return.
The average U.S. price of regular-grade gasoline jumped 14 cents a gallon over the past two weeks to $2.64, according to the Associated Press. The price at the pump has climbed 46 cents since Nov. 20.
Some of the rise this past week was attributable to the deep freeze in the South, which temporarily shut down production at about a dozen refineries in and around Texas. Resumption of production there could bring some temporary relief, but the long-term outlook is not as rosy.
Industry analyst Trilby Lundberg of the Lundberg Survey told the AP Sunday that gas prices will likely continue to rise as crude oil costs remain high. Analysts at Gas Buddy see a similar trajectory emerging.
“As we near spring weather, we’ll likely see another longer-term rise in prices begin as refineries start to transition to summer gasoline,” Patrick De Haan, head of petroleum analysis for GasBuddy said in a blog post this week.
De Haan told USA Today that $2.80 is a more likely average peak this spring, but Phil Flynn of the Price Futures Group told the paper the $3 mark is a real possibility. Even if the $3 average barrier isn’t broken, rising crude oil prices likely mean averages near $2 per gallon we saw last year are long gone.
“The era of low gasoline prices has ended and we are entering a new era of higher prices,” Flynn says.
Yahoo Finance points to service disruptions and the pricier summer blends as contributing factors to the price rise but also sees an increased likelihood of post-vaccination travel and stimulus spending as reasons demand will surge.
On average, residents of California and Hawaii were already paying over $3 per gallon this week, with the average price in Washington State sitting at $2.98. The lowest average is $2.20 in Baton Rouge, Louisiana.
