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Gas prices in the US reached a new record high Thursday – recording a national average of $4.589 per gallon – with analysts at JPMorgan now warning that that number could surpass the $6 mark by the end of the summer.
‘There is a real risk the price could reach $6+ a gallon by August,’ Natasha Kaneva, head of global oil and commodities research at the prominent investment bank, told CNN Tuesday.
The concerning forecast comes as US gas prices have surged to previously unseen highs during Joe Biden’s presidency.
The nation’s current average gasoline price, $4.58-a-gallon, stands as nearly double the $2.41 average seen during former president Donald Trump’s last month in office.
The number topped Wednesday’s previous record of $4.567, which eclipsed Tuesday’s record of $4.523, which beat out Monday’s record of $4.470.
The uptick has seen the price of gas since top $4-a-gallon in each of the 50 states – a dubious achievement never before reached.
Gas prices in the US reached a new record high Thursday – recording a national average of $4.589 per gallon – with analysts at JPMorgan now warning that that number could surpass the $6 mark by the end of the summer. Pictured is a person at a pump in Pelatuma, California, where gas prices have already surpassed the $6 mark
The nation’s current average gasoline price, $4.58-a-gallon, stands as nearly double the $2.41 average seen during former president Donald Trump’s last month in office. The uptick has seen the price of gas since top $4-a-gallon in each of the 50 states – a marker never before reached
The meteoric rise – which also has been attributed as a consequence of oil producer Russia’s invasion of Ukraine – has seen California already surpass the $6, recording a state average of $6.061 Thursday.
Those prices have climbed since Biden was elected in November 2020, then skyrocketing earlier this year after the invasion of Ukraine, which has seen gas prices shoot up by at least 27 percent in about three months.
Meanwhile, as the European Union edges toward oil sanctions on Russia amid the county’s military operations in the country, high inflation seen under Biden’s Administration has further compounded the issue of rising fuel costs.
And with US gasoline inventories sitting at their lowest seasonal levels since 2019, JPMorgan says the situation will likely worsen in the coming months, with the bank conceding it will be difficult to satisfy consumer demand for gas during this summer’s driving season – when millions of American families are likely to take trips and vacations.
The number topped Wednesday’s previous record of $4.567, which eclipsed Tuesday’s record of $4.523, which beat out Monday’s record of $4.470. Gas prices have climbed since Biden was elected in November 2020, before skyrocketing earlier this year after the invasion of Ukraine, which has seen gas prices shoot up by at least 27 percent in about three months
‘With expectations of strong driving demand…US retail price could surge another 37% by August,’ the bank wrote in a recently released report, titled ‘Cruel Summer.’
‘Typically,’ Morgan analysts wrote in their warning, ‘refiners produce more gasoline ahead of the summer road-trip season, building up inventories.
‘But this year, since mid-April, US gasoline inventories have fallen counter seasonally.’
JPMorgan also warned that East Coast gasoline inventories are at their lowest level in more than a decade, due to higher-than-normal exports of gasoline triggered by rising gas costs overseas in Europe – an uptick worse than the one seen in the US.
The rising rates have seen fuel supplies at US and Canadian refineries that normally supply Eastern US gas stations dwindle to crisis levels that could fall below levels seen in 2008, when the country experienced its worst recession since the Great Depression.
‘If exports persist at this elevated pace and refinery runs – already near the top range for reasonable utilization rates – fall within our expectations, gasoline inventories could continue to draw to levels below 2008 lows and retail gasoline prices could climb to $6/gallon or even higher,’ the analysts wrote.
At that rate, the analysts write, total US gasoline inventories could soon fall to levels not seen since the 1950s – an occurrence that would see gas prices swell even further.
With US gasoline inventories sitting at their lowest seasonal levels since 2019, analysts say gas prices will likely swell in the coming months, as refineries struggle satisfy consumer demand for gas during this summer’s driving season. They say the shortage could
High high inflation seen under Biden’s Administration has further compounded the issue of rising fuel costs. Inflation began to soar in April 2021, and has since risen to above 8 percent
Food inflation is up 9.4 percent, with popular items like bacon up 17 percent and beef up 14 percent
Such a decline in gas stock would lead to a 37 percent jump in prices, the economists write, which would then yield a national average of roughly $6.20 a gallon.
At those levels, gas prices would surge past their inflation-adjusted high of $5.38, seen in June 2008, when gas prices hit $4.11, not adjusted for inflation, according to the Energy Information Administration.
Morgan warns that unless refineries ‘immediately’ nix most of its exports and shift toward producing its own gasoline, ‘US consumers should not expect much in the way of relief in prices at the pump until the end of the year.’
Refineries, meanwhile, are struggling to meet that demand, with many closed permanently during the pandemic, and others converted to refine renewable fuels rather than crude oil.
Gas prices could fall, however, if the US falls into recession – a strong possibility, experts say, when looking at the country’s current inflation rate, which reached its highest point in more than four decades in March.
A gas pump in Arlington, Virginia, with a sticker blaming Biden for gas prices. Prices have steadily climbed since President Biden was elected in November of 2020
If that occurs, or even if the economy slows, the US could see its currently burgeoning job growth – which saw 428,000 Americans reportedly find jobs last month – drastically decline, with less people driving to work, with less money to spend on gas.
Biden has blamed Russian President Vladimir Putin for both the US’ recent gas surge and rising inflation, saying in April: ‘Putin’s invasion of Ukraine has driven up gas prices and food prices all over the world.’
Biden, the US oldest-ever president, at 79, explained at the time: ‘Ukraine and Russia are the one and two largest wheat producers in the world. We’re three. They’re shut down. We saw that in yesterday’s inflation data.’
The White House even dubbed the surge as the ‘#PutinPriceHike,’ vowing that the president would do everything he can to shield Americans from ‘pain at the pump.’