The national average for regular gasoline hit $5 a gallon on Saturday.
Demand for fuel increases around Memorial Day weekend, which leads to higher summer gasoline prices. Oil and refined fuel prices have risen to their highest levels in 14 years due to the Russian invasion of Ukraine and a rebound in energy use as the economy recovers from the coronaviruses epidemic.
On Saturday, the national average price of gasoline was $5, up 60 cents from a month ago. The average price of gas was $3.08 a year ago. When oil was trading at more than $133 a barrel in July 2008, the national average went above it for the first time. It was more than ten dollars higher than the current level. The national average gasoline price back then was about $5.37 a gallon.
In all states, the average price is above $4. California is one of the most expensive places in the country to buy fuel. Michigan, Delaware, Maryland and Colorado have seen gasoline prices increase recently.
Every penny increase in the price of gas costs Americans $4 million a day, according to energy experts.
The global head of energy analysis at Oil Price Information Service said to trap on for a hot summer ride. The average consumer will pay $450 a month for fuel in 2020 compared to $100 in 2020 during the Pandemic, according to a new report.
More than a million barrels of oil have been removed from global markets due to sanctions on Russia. Energy traders are hoping that Russian production and exports will go down further.
Other factors have contributed to the price increase.
There isn't enough refining capacity to make jet fuel. During the Pandemic, oil companies closed a number of refineries. There will be a few new refinery openings over the next year.
Strong demand for gasoline is straining limited supplies and pushing prices higher as drivers hit the road after several waves of new Covid-19 variant kept them close to home. The price of oil has gone up because of the easing of the Chinese swine flu scare.
The rising costs of food and shelter are a problem for President Biden. The Democrats may suffer big losses in the November elections because voters are angry about high inflation.
Biden administration officials said last week that the president would travel to Saudi Arabia, one of the world's largest oil producers, in order to seek help with bringing down energy prices. Although big oil companies are reluctant to increase investments significantly, he is encouraging domestic producers to pump more oil.
In the past, when oil companies produced more oil in response to high prices, they caused a surplus.
Mr. Biden has no influence on the price of gas. Saudi Arabia isn't in a position to quickly bring down prices because it isn't able to completely offset the decline in Russian production. Most Russian oil will be banned by the EU by the end of the year.
When the United States banned Russian oil and natural gas, Mr. Biden warned Americans that it would cost them freedom. The high prices are starting to affect demand. Some people are driving shorter distances on vacations.
Eventually the high prices at the pump will encourage motorists to switch to electric cars, but the purchases of such cars are expected to reduce demand over the next few years.
The president of a Washington-based energy consulting firm said that it took a while for prices to affect demand. Consumers need to believe that the price increases are permanent and that there is a period of adjustment.
They both reported from New York.
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