ALEXANDRIA, Va.—Gas prices hit another record high at the pumps today. The national average for a regular gallon of gas is $4.404 a gallon, up from $4.374 yesterday, according to AAA. The price is not adjusted for inflation, reports CNBC. Consumers are now paying $1.41 more a gallon than last year.
Diesel is also up, with the national average at $5.553 per gallon today, up slightly from $5.55 a gallon yesterday, which is also a record. Prices have hit a new high for at least the past eight days.
Meanwhile, West Texas Intermediate crude, the U.S. oil benchmark, was trading around $105.16 per barrel this morning.
Although gasoline and diesel prices are up, crude oil is trending downward—West Texas Intermediate crude future prices, the U.S. oil benchmark, were around $101.66 per barrel Tuesday, which is much less than its high of around $130 per barrel in March.
Crude oil does make up over half the cost of a gallon of gas, but refineries are running near maximum capacity. The U.S. refining capacity has declined over the last few years, and now Europe is competing for the same petroleum products as it seeks to move away from Russian energy.
Andy Lipow, president of Lipow Oil Associates, told CNBC that he forecasts prices for regular gasoline rising an additional 15 to 20 cents over the next two weeks, ultimately hitting $4.50 per gallon.
Tom Kloza, global head of energy analysis for the Oil Price Information Service, told CNN that gas prices could be near their highest point for the month, but when they do fall, they won’t be much less. Kloza expects they could once again set a record after schools let out and drivers start hitting the road for vacations next month.
"Anything goes from June 20 to Labor Day," Kloza told CNN.
The U.S. Energy Information Administration (EIA) forecasts that U.S. crude oil production will average 11.9 million barrels per day this year and 12.8 million barrels per day in 2023, which would surpass the record average production of 12.3 million barrels per day set in 2019, according to a news release.
Despite the increases in production, EIA expects the Brent crude oil price to remain above $100 per barrel this year, according to the agency’s May 2022 Short-Term Energy Outlook.
“A high level of uncertainty remains in our outlooks, but we have consistently forecast that elevated crude oil prices would help drive record-level annual U.S. oil production levels in 2023,” said EIA Administrator Joe DeCarolis. “Low global oil inventories coupled with continued high demand for gasoline, diesel and other petroleum products means that increased production likely won’t have much impact on prices in the short term.”
NACS’ most recent blog post, “Is Gas Tax Relief a Good Idea?” discusses how easing consumer pain at the pump is a good idea, unless it causes more problems.
The Convenience Matters podcast episode “What’s the Tipping Point for Gas Prices?” explores how much pain at the pump that consumers will tolerate and what’s ahead for the summer driving season.
Here’s how to explain to customers why gas prices aren’t dropping quicker when the price of crude oil does drop.