Gas prices are primed to rise in a few weeks, but American drivers won't be hit with record costs again this summer, GasBuddy says

US gas prices have fallen sharply since June.

JOSEPH PREZIOSO/Getty Images

• Prices at the pump are primed to rise again, but don't expect the eye-popping levels of last year, according to GasBuddy.
• "I do think that prices will start rising in March and that's a trend that could last all the way through Memorial Day," said Patrick De Haan, head of petroleum analysis at the firm.
• He said the national average price of gas at the pump could hit the $4 a gallon a mark in most major US cities, but not the $5 highs seen last year.

American drivers should brace for gas prices at the pump to rise again this summer — but they'll tick higher rather than skyrocket like they did last year, according to Gas Buddy's head analyst.

The average US cost of gasoline could hit the $4 a gallon a mark in most major US cities, but not the record-setting high above $5 seen last year, Patrick De Haan said. The price was $3.380 on Friday.

"I do think that prices will start rising in March, and that's a trend that could last all the way through Memorial Day," de Haan, head of petroleum analysis at GasBuddy, told Insider.

Typically, there's a lull in demand for gas between spring break and Memorial Day in late May — when Americans start to go on trips and drive more — that could normally help lower prices.

"A lot of it really centers around refineries and how they're able to handle their maintenance before the start of the summer driving season," de Haan said, about any upward pressure on prices. 

Strong driving demand for fuel during the warmer months tends to give an uplift to prices. Another factor is the annual mandated switch to more-expensive summer blends of gasoline in some regions, which in the past have added as much as 10 cents to the cost of a gallon. 

This summer, Californians are likely to shell out about $1 a gallon above the national average, according to de Haan — but not the near $7 a gallon GasBuddy predicted in December. 

"California could hit $5. But I'm hopeful that even California will not see those records-setting prices again this summer," he said. 

US gas prices hit their highest levels ever in June last year, when the national average topped $5 a gallon. They rose as global oil prices surged thanks to disruptions caused by Russia's war with Ukraine and an energy crisis in Europe. 

"If anything, the last couple of years has taught us that nothing is really impossible with markets. But I think at this point, I do not see a repeat of 2022's record-setting levels," de Haan said.

"Of course, there's a lot of wildcards — things like the ongoing Russian war in Ukraine, China's reopening, the US economy, inflation, unemployment."

Crude oil prices have fallen back from last year's highs, but there are risks a drop in supply or rise in demand could push them up again. Russia faces hurdles shipping its oil thanks to price caps and sanctions imposed by Western nations, while demand in economic powerhouse China could surge now that COVID-19 restrictions have been lifted.

But there is some measure of consistency, even if the situation isn't consistent, according to de Haan. 

"We have more certainty about the flow of oil. And so every month that goes by, there has been less of an impact from Russia or Ukraine. So I do not see a resurgence in prices to the degree that we did last year," he said. 

Read the original article on Business Insider

from Business Insider https://ift.tt/p425cz1