How high could gas prices go? More pain at the pump likely coming

Primarily based on wholesale gasoline futures simply earlier than Biden’s announcement, common gasoline costs will in all probability hit $4.50 a gallon nationally within the subsequent couple of days. And if crude oil costs preserve rising, analysts say it’s not exhausting to see gas prices reaching $5 a gallon on common — which suggests $6 to $7 in California and a few components of the Northeast.

What motorists pay at filling stations is decided principally by crude costs on the world market. These costs have jumped about 35% since Russia’s invasion of Ukraine on Feb. 24.

Markets have already priced in among the greater prices, however there’s normally a lag of two to a few weeks earlier than refineries cross the rise they pay for crude alongside to customers.

Pump costs had been already hovering simply on studies of the attainable U.S. ban. On Tuesday the nationwide common for normal gasoline topped $4.17 a gallon, breaking the earlier document of $4.114 set in July 2008, based on the American Vehicle Assn. One 12 months in the past, common gasoline price slightly over $2.77. These figures aren’t adjusted for inflation. (At right now’s costs, the associated fee in July 2008 can be about $5.30 a gallon.)

Patrick DeHaan, head of petroleum evaluation at GasBuddy, mentioned there might be months of excessive or rising costs forward — probably by the summer time — “until there’s a drastic enchancment within the Russia-Ukraine state of affairs.”