Wed. Oct 4th, 2023
    Gas Prices Reach Highest Level of the Year as Oil Prices Surge

    Gasoline prices in the United States have soared to their highest level in 2024, as oil prices push past $92 a barrel. This is a stark contrast to the usual cool-off in prices after the summer driving season ends. The aggressive supply cuts by Saudi Arabia and Russia have played a significant role in driving up oil prices.

    The average national price for regular gas reached $3.88 per gallon, marking the highest price since October 2022. In just the past week, gas prices have increased by five cents per gallon. This surge in prices is causing concern for consumers, the Federal Reserve, and the White House, as it has the potential to negatively impact the fight against inflation.

    Although the current national average is below the record high of $5.02 per gallon in June 2022, it is important to note that gas prices are now 20 cents higher compared to the same period last year. In fact, eleven US states now have an average price of $4 or higher for regular gas, including Colorado, Oregon, and Arizona. California stands out with an average price of $5.69 per gallon, a 49-cent increase in the past month alone.

    The oil market, which heavily influences gas prices, continues to set new highs. US crude reached $92.33 per barrel, the first time it has traded above $92 since November 8, 2022. Brent crude, the international benchmark, hit a 10-month high of $94.95 per barrel on Monday.

    The surge in oil prices has been fueled by both supply cuts and other factors such as the catastrophic floods in Libya and easing US recession fears. Citigroup has predicted that geopolitics could drive oil prices above $100 per barrel temporarily, but they believe that $90 prices are unsustainable. They expect US oil prices to drop below $70 per barrel by the second quarter of 2024.

    Treasury Secretary Janet Yellen believes that energy prices will eventually stabilize, noting that gas prices have already decreased from their highs last summer. The Biden administration is closely monitoring the situation and has taken action, releasing emergency oil reserves from the Strategic Petroleum Reserve.

    Sources: AAA, CNN