Brace yourselves, American drivers: gasoline prices are poised to climb in the coming weeks as refinery disruptions disrupt supplies just ahead of a seasonal spike in demand, experts caution.
The average national price for a gallon of gasoline has surged over 9% since the beginning of the year, reaching approximately $3.40 as of March 8, the highest level since early November, according to data from the motorist group AAA.
This uptick in gasoline costs has contributed to a notable increase in consumer prices, further fueling concerns about stubborn inflation levels in the United States. The topic is expected to be a focal point for both Democratic and Republican parties as the presidential elections loom in November.
U.S. gasoline inventories plummeted by 5.7 million barrels to 234.1 million barrels in the week ending March 8, trailing more than 2% behind their five-year seasonal average, as reported by the U.S. Energy Information Administration this week.
Tom Kloza, head of energy analysis at Oil Price Information Service, anticipates even steeper gasoline price hikes in the near future, citing heightened summer travel demand, dwindling fuel inventories, and ongoing refinery challenges worldwide.
For the eighth consecutive week, total U.S. refinery utilization rates have remained below 87%, marking the longest streak since 2021. Research firm IIR Energy projects approximately 1.2 million barrels per day of the country’s 18 million bpd refining capacity to be offline this week, with 885,000 bpd expected to be offline next week.
Recent Ukrainian drone strikes on Russian refineries have exacerbated supply anxieties, contributing to spikes in fuel and crude oil prices.
Even before the attacks, oil prices were climbing due to extended supply cuts by the Organization of Petroleum Exporting Countries (OPEC) and its allies. Consequently, the Energy Information Administration (EIA) revised its retail gasoline price forecast for the year, raising it by 20 cents to $3.50 a gallon.
On Wednesday, U.S. crude oil prices surged by $2.16 to settle at $79.72 a barrel, while Brent crude rose by $2.11 to $84.03 a barrel.
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