Gas prices have continue their historic climb after a brief lull before the Memorial Day holiday this past weekend. Average gas prices hit $4.67 Wednesday, and yet another state, Illinois, joined the $5 on average for a gallon club.
And the hike in fuel costs isn’t showing any signs of slowing. In fact, quite the opposite. From AAA:
Crude oil has moved above $115 a barrel due to fears of further global supply constraints caused by a European Union (EU) ban on Russian oil exports. And domestic gas demand may again start to climb as drivers fuel up for the three-month-long summer travel season, which began this Memorial Day weekend. AAA forecast nearly 35 million travelers hit the road for Memorial Day. It’s the highest number since 2019, despite record prices at the gas pump.
“So far, the pent-up urge to travel caused by the pandemic outweighs high pump prices for many consumers,” said Andrew Gross, AAA spokesperson. “But 67% of drivers recently surveyed told us they would change their driving habits if gas hit $4.50 a gallon. That number rises to 75% at $5 a gallon. If pump prices keep rising, will people alter their summer travel plans? That remains to be seen.”
According to Energy Information Administration (EIA) data, total domestic gasoline stocks decreased by 500,000 bbl to 219.7 million bbl last week. Gasoline demand also dipped from 9 million b/d to 8.8 million b/d, approximately 700,000 b/d lower than a year ago. The softening of gas demand helped minimize price increases ahead of Memorial Day. However, gas demand may spike this week after drivers took to the roads for the holiday. But pump price increases could be limited if demand slows again following the holiday weekend.
See, gas prices stabilized a bit before the holiday due to decreased demand, but now that it is officially summer and travel-staved Americans free of COVID-19 lockdowns want to hit the road, gas is climbing again. The $5 club will likely add a few new members in the coming days. As Insider points out, Arizona and 10 other states in the Northwest are just a few cents away from joining Alaska, California, Hawaii, Illinois, Nevada, Oregon, and Washington. JP Morgan predicted in May that prices across the country could hit $6 a gallon.
Gas prices are currently up 45 cents over last month and a $1.58 over last year. They still aren’t quite at 2008 levels, when gas hit $4.32 per gallon, or $5.66 in 2022 money, according to the Bureau of Labor Statistics.