US Gas Prices Expected To Hit US$4 Per Gallon In Coming Weeks

US Gas Prices
A Shell logo on a fuel pump while a car is refueled at a gas station (Photo: Reuters)

Over the past eight weeks, gasoline prices in the United States have continued to climb. According to an industry report, which collected data from over 135,000 gas stations across the country, the average price per gallon now stands at US$2.75 per gallon. The price is an 11 percent increase in the prices recorded last month.

In the last 90 days, pump prices across the country have ticked upward by about US$0.50 per gallon on average. Several states, such as Washington, Oregon, Alaska, Nevada, and Hawaii, are already experiencing average prices of above US$3 a gallon.

The price of crude oil, which directly affects the price of gasoline, has also risen for over the last three month. Price for West Texas Intermediate (WTI) crude oil had increased to US$64.34 per barrel this month from just US$48.52 per barrel in early January.

Nationwide prices have so far responded accordingly with the increase in crude oil prices, but some states have experienced significantly higher increases. The increase of West Coast gasoline prices is particularly high in California, with the forecast predicting that it may soon breach the US$4 per gallon mark. If this turns out to be true, this would be the highest price for gas the state has ever seen in the over five years.

Analysts predict that California breaching the US$4 per gallon mark is very likely to happen given the recent events that have transpired involving the various refineries in the state. Due to the state's strict environmental regulations, Valero's refinery located in the Bay Area was shut down due to air pollution concerns.

To make matters worse, the Phillips 55 refinery in Los Angeles was recently shut down due to a fire. Additionally, Chevron's refinery in El Segundo has recently been experiencing problems resulting in an outage that has now lasted for more than a week.

According to GasBuddy, a firm that tracks real-time fuel prices across the United States, the West Coast will likely be taking the brunt of the price increase in the coming weeks. The company predicts that the price of gasoline will continue to rise given the lack of any good news on the horizon. At the start of the week, gas prices in Los Angeles were pegged at around US$3.88 per gallon; making it more expensive to buy gas in the city than in Hawaii.

The Oil Price Information Service mentioned that US$4 a gallon may become commonplace in some states in the coming weeks. This is mostly due to unplanned refinery maintenance across several locations and the fact that the country has not imported any oil from Venezuela in the last few weeks. 

© 2019 Business Times All rights reserved. Do not reproduce without permission.
Sign Up for Newsletters and Alerts