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Gasoline prices hit new highs

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The price of a gallon of gasoline in the United States has jumped past $5 a gallon, according to AAA.

Gasoline prices hit a record high, reaching a national average of $5.01 per gallon.

With the summer driving season at hand, the national average for a gallon of gasoline has jumped and is 15 cents higher than a week ago, 58 cents higher than a month ago and $1.94 more than a year ago. As of June 13, the national average was $5.01 – an all-time high not seen since AAA has started collecting price data In 2000.

“Based on the demand we’re seeing, it appears the high prices haven’t really deterred drivers,” said AAA spokesman Andrew Gross. “If prices stay at $5 or above, we could see people start to change their daily driving habits or their lifestyle, but that hasn’t happened yet,” Gross added.

The cost of a barrel of oil is over $120, nearly double the price last August, as rising demand for oil outpaces tight global supply and pressure from sanctions and boycotts on Russian oil, which began after the start of the Russian invasion of Ukraine.

Shock of war in Ukraine ripples through global economy

Photo of AAA Oil Refinery
Oil production in the United States is on the rise as demand increases with the summer driving season.

The shock to the global economy created by the war-triggered price spike in Ukraine contributed to inflation in Europe and the United States despite a steady increase in oil production from wells in the United States

Meanwhile, domestic gasoline demand remains robust as the summer driving season gathers pace, AAA noted.

According to new data from the Energy Information Administration (EIA), total inland inventory fell by 800,000 barrels to 218.2 million barrels.

Crude prices rose despite the EIA’s report that total domestic inventories rose 2.1 million barrels to 416.8 million barrels last week.

However, the current storage level is still about 12% lower than a year ago, contributing to higher crude prices. Crude prices could rise further this week if the next EIA report shows lower inventories.

AAA Gas Price Chart 6-13-22

People are always pushing the demand up

Meanwhile, gasoline demand has increased from 8.98 million barrels per day to 9.2 million barrels per day as drivers continue to fill up for the summer driving season, typically a time when the demand for gasoline increases.

The dynamic between falling supply and rising demand contributes to the rise in prices at the pump. Coupled with rising crude oil prices, this means the price of gas is likely to remain high for the foreseeable future.

The biggest price increases last week were in West Virginia, where the price of a gallon of gasoline rose 28 cents. Prices also rose in Montana by 27 cents, Colorado by 25 cents, Kansas by 23 cents and Virginia by 23 cents. The price per gallon rose 22 cents in Missouri, North Dakota, Indiana and Ohio and rose 21 cents in New Mexico and New Mexico.

The most expensive gasoline is found in California where the average price reached $6.43 per gallon and in Nevada where the price is $5.65 per gallon.