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How high could gas prices get this summer? What experts say as Memorial Day nears

Julia Marnin, The Charlotte Observer on

Published in Business News

With the busy summer travel season approaching, many are wondering how high could U.S. gas prices get?

Prices hit a nationwide record on Tuesday, May 24 — $4.598 a gallon — according to AAA.

This comes after a JPMorgan analyst predicted a “cruel summer” with gas prices potentially hitting a nationwide average of at least $6 in a Global Commodities Oil Flash Note published May 17.

“With expectations of strong driving demand — traditionally, the US summer driving season starts on Memorial Day, which lands this year on May 30, and lasts until Labor Day in early September — US retail price could surge another 37% by August to a $6.20/gal national average.”

Here’s what experts say as Memorial Day nears:

Supply and demand for fuel

 

“Typically, refiners produce more gasoline ahead of the summer road-trip season, building up inventories. But this year, since mid-April, US gasoline inventories have fallen counter seasonally and today sit at the lowest seasonal levels since 2019,” the JPMorgan report said.

The disconnect between supply and a higher seasonal demand is why the analyst has predicted prices could spike further and hit $6, a price never seen before, according to the report.

Patrick De Haan, GasBuddy’s head of petroleum analysis, told McClatchy News over the phone that for “various reasons,” roughly half a dozen refineries have been lost in the U.S. since 2019 and “amidst demand, that’s very high.”

“There’s a diminished ability for refineries to meet that demand. So they’re going to be critical this summer delivering enough fuel,” he added.

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