The average price of gasoline could reach $6 nationwide by the end of the summer after it crossed the frightening threshold in California, according to analysts at JPMorgan.
Limited offer exacerbated by Russia’s invasion of UkraineBesides what is expected to be very high demand as Americans take the roads this summer for travel, gas prices are likely to push higher.
US crude rose to $114.07 a barrel while Brent crude, the international benchmark, traded at $114.86 a barrel on Tuesday. According to the US Energy Information Administration.
“There is a real risk that the price could reach $6+ per gallon by August,” said Natasha Kaneva, head of global oil and commodities research at JPMorgan. For CNN on Tuesday.
“With expectations of strong demand… the US retail price may rise another 37% by August,” JPMorgan analysts wrote in a report.
The average price for a gallon of gas nationwide soared to a record $4.56 on Wednesday, according to AAA.
The only three states that were under $4 a gallon as of Monday — Georgia, Kansas, and Oklahoma — I crossed the threshold on TuesdayAAA reported.
A week ago, the average price of gas per gallon was about 16 cents cheaper. Last month, the average was 48 cents cheaper. A year ago, the average cost of a gallon of gas was $3.04.
California leads the state in the highest average price per gallon, according to the AAA. As of Wednesday, the cost of a gallon of gas in the Golden State is $6.05. Motorists in the Bay Area as well as Los Angeles County were feeling the pinch.
The average cost of gas in San Francisco was $6.30 per gallon, while in neighboring Marin County, it was $6.27. In Los Angeles, motorists were paying $6.09 per gallon.
Kansas was the state with the cheapest gas as of Wednesday, with a gallon selling for $4.03.
The only way gas doesn’t reach $6 a gallon is if demand drops due to higher prices.
The oil and gas industry has criticized the Biden administration for its policies, which they say have kept supplies limited.
last week, The Biden administration announced that it will cancel Three planned oil and gas leases in the Gulf of Mexico and off the coast of Alaska – removing millions of acres of potential exploration.
The Department of the Interior announced the decision last Wednesday night, citing a lack of industry interest in drilling off the coast of Alaska and “conflicting court rulings” that have complicated drilling efforts in the Gulf of Mexico, where the bulk of US offshore drilling is carried out.
The decision likely means the Biden administration will not sell an offshore drilling lease this year, and comes as the Interior Ministry appears ready to allow a mandatory five-year plan for offshore drilling that expires next month.
“Unfortunately, this has become a pattern — the administration is talking about the need for more supply and is taking action to constrain it,” said Frank Macciarola, senior vice president of the American Petroleum Institute, the largest oil and gas industry lobby.
“With geopolitical volatility and global energy prices continuing to rise, we once again urge the administration to end the uncertainty and immediately act on a new five-year Federal Overseas Leasing Program,” he said.