06/03/2024
Summer Gas Prices: Potential Rise Amid Economic Factors
As summer approaches, drivers may need to prepare for a potential increase in prices. Experts are closely monitoring several factors that could contribute to a rise in in the coming months.
One significant factor is the seasonal shift to summer-grade gasoline, which is more expensive to produce due to its environmental standards. This switch is required by refiners and product terminals by May 1, with retailers completing the changeover by June 1. The limited ability to add butane to blends also decreases the overall supply of gasoline blending components, potentially leading to higher prices at the pump.
Another factor influencing gas prices is the demand during the summer season. With the start of summer vacations and road trips, the increased demand for gasoline often drives up prices. This year, however, the United States miles driven is expected to be down due to inflation and the cost of living. This decrease in travel could potentially offset some of the price increase.
The administration has taken steps to mitigate potential price hikes by releasing 1 million barrels of gasoline from a Northeast reserve established after Superstorm Sandy. This move is intended to provide relief for motorists as the summer driving season begins.
Despite these efforts, some analysts predict that gas prices will peak for the year in the upper $3 range, with a possibility of reaching $4 per gallon in some areas. However, most experts predict a 2024 peak U.S. average gas price below $4.
As we head into the summer months, it remains to be seen how these factors will ultimately impact gas prices. Motorists are advised to keep an eye on local and plan accordingly for their summer travel.
By Daniel Webster
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