Gas prices have increased for the third consecutive week, hitting a five-month high.
The average price per gallon is now $3.65, an increase of $0.221 since March, according to data from GasBuddy.
“With oil prices touching their highest level of 2023 at nearly $83 per barrel, the national average cost of gasoline has continued to inch higher, with 45 of the nation’s 50 states seeing prices rise over the last week.
“While the rising price of oil is likely the largest factor in rising gas prices, seasonal impacts continue to also exert pressure on price,” GasBuddy petroleum analyst Patrick De Haan said in a post this week.
“With the Northeast making the final step in the transition to summer gasoline this week, states in that region should expect a sharp rise in gasoline prices over the next week or two. Every other region has already seen the final step in the transition occur, so while other areas will see prices continue to slowly rise, the Northeast is likely to see a pretty hefty jump of 15-40 cents per gallon soon.
“Oil prices remain a wildcard, but we’re likely a few weeks away from seeing the national average peak. Whether it hits $4 per gallon or not is still perhaps a 50/50 chance.”
Last week, crude oil prices hit their highest levels of 2023 after OPEC announced a surprise production cut of 1.66 million barrels per day starting in May, according to OilPrice.com.
Analysts predicted that the cut would immediately cause a rise in oil prices, a move that the United States called “inadvisable,” according to Reuters.
Oil production cuts, coupled with increasing U.S. gasoline demand, which rose 1.4% last week according to Zero Hedge, would likely point to further gas price hikes leading into the summer, but recent Fed monetary policy moves have made the future outlook murkier.
OPEC said last week that global demand will likely increase 2.5% year over year in the second and third quarters, according to Investopedia.
“Heightened mobility in the upcoming driving season in the U.S. is expected to provide the usual additional demand for transportation fuels,” OPEC said, per Investopedia.
“However, any weakening in the economy on the back of ongoing monetary tightening measures by the Federal Reserve may offset some of this seasonal dynamic.”