Gas Prices Are Headed Up: Expect More Pain at the Pump This Summer – A gas station in Mendocino, California has the dubious distinction of having the highest gasoline prices in the country. On Monday, Schalafer’s Auto Repair was selling regular gas for $9.60 a gallon. The Northern California gasoline station’s prices were considerably higher than the national average, which is hovering just under $5 a gallon.
Yet, consumers should get ready to pay a bit more as the summer driving season ramps up.
Goldman Sachs economists predicted this week that oil prices will surge to $140 a barrel this summer, driven in part because of a drop in Russian production, while a gradual recovery of Chinese demand will add to the pressure on already limited supplies.
The high oil and with it gasoline prices will only continue to rise even higher this summer, according to the Wall Street bank’s recent forecast. Brent crude oil, the international benchmark, is currently trading at about $120 a barrel, and Goldman Sachs had previously predicted prices would reach $125 a barrel between July and September.
As demand hasn’t lowered, there are reasons to suggest that the prices will likely only go higher. The economists warned that prices would need to hit $160 for prices to taper off – due to “demand destruction” – which could finally result in increased production to lower costs.
“A large spike in prices remains quite possible this summer,” Goldman Sachs strategists wrote in a report to clients.
AAA has predicted that U.S. gas prices might only decrease around September when we start entering the cooler months.
Putin Did That
“I did that,” proclaim the various stickers with President Joe Biden‘s face on it. Those stickers have been turning up at gasoline station pumps around the country, much to the dismay of station owners and managers. Yet, in reality, much of the blame for the price to fill up the tank can be blamed on Russian President Vladimir Putin.
Oil prices are up roughly 50 percent as a result of Russia’s unprovoked invasion of Ukraine, and as the war continues, prices have reached record levels.
High Gas Prices and Hurricane Season
The final equation on gas prices could come down to how bad of a hurricane season is this year. Past storms have resulted in massive spikes when a refinery is shuttered.
“Hurricane season, of course would obviously bring issues. One of those hurricanes coming up through the gulf and through the Gulf of Mexico. There are a lot of oil refineries and places that mine oil, so it could be hazardous if it strikes,” Associate Professor at the Westminster College School of Business, Bob Badowski, told WFMJ 21 News this week.
Even more ominous isn’t that a hurricane could drive up prices, but that the cost of gasoline could force some in the storm zones to decide not to evacuate. There are now reports that many Americans would stay put and ride out an approaching storm rather than pay the extra money to fill up the tank and drive to safety.
Those lower prices can’t come soon enough.
Now a Senior Editor for 1945, Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. Peter is also a Contributing Writer for Forbes.
