Spring has sprung — and so have gas prices
After several weeks of relative stability, gasoline prices are on the rise in much of the country as demand reached a record level for March.
The week began with prices at around $2.55 per gallon of unleaded, just a couple cents more than last week. But by mid-morning Tuesday, prices climbed to $2.58, signaling a trend that experts say isn’t likely to reverse as the weather continues to warm up.
“Seasonal factors continue to weigh on the market,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “The national average now stands at its highest level in over a month and is likely to continue moving higher in the weeks ahead as demand continues to recover from the winter blues.”
That recovery has already begun, according to the latest data from the Energy Information Administration. The agency said Americans are consuming roughly 9.6 million barrels of gas per day, a level that’s more typical of summer months. Meanwhile, gasoline inventories fell more than 6 million barrels.
AAA forecasts per-gallon prices could hit $2.70 this spring, which would be the highest since summer 2015, when prices hit $2.81. Jeanette Casselano, AAA spokesperson, said the high price of crude — which rose 2.2 percent Tuesday to $62.26 — and declining US gasoline inventories could have an impact on Americans’ spending habit.
“This spring, consumers may have to make decisions on where they can cut costs to cover gas prices that are potentially 40-cents more per gallon than last spring,” Casselano said.
Indeed, a recent AAA survey found that a quarter of Americans would consider $2.75 a tipping point, forcing them to change their driving habits or lifestyle to offset the higher prices at the pump. About 40 percent said they wouldn’t drive less or delay certain purchases until prices hit $3.00, which experts say is unlikely.
Casselano said motorists will see the price spike again in April when the weather is warmer and gasoline refiners start switching over to summer blend. It’s all uphill at that point, she says: “Consumers can expect prices to likely increase throughout April, May and into the start of summer.”