Soaring gas prices peak just in time for Memorial Day weekend



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/ Source: CNBC.com

By Tom DiChristopher, CNBC

The biggest rise in the price of gasoline for years is running out, just in time for the start of the summer driving season.

With Memorial Day approaching, the average price of gasoline on the national market is above the record level of the year and just above $ 2.80 per gallon.

The national average climbed 67 cents per gallon between New Year and May 4, as pump prices peaked, according to GasBuddy. This is the second largest increase ever recorded for the beginning of the year, surpassing the 2011 increase of 93 cents per gallon.

The same goes for the weekend of last year. The price of gasoline rose earlier in the year, but was not high enough to prevent too many Americans from escaping. Nevertheless, they are well above the levels recorded in 2016 and 2017, when a depressed oil market gave motorists a big break at the pump.

"While the price hike has been steep this spring, perhaps the most important factor is that in many places, gasoline prices are still well below their record highs and more importantly , more than 50% of the country's gas stations sell for $ 2.99 a gallon or less, "said Patrick DeHaan, head of petroleum analysis at GasBuddy, in a press release.

Nearly 75% of Americans plan to go on a trip this summer, an increase over last year, according to a GasBuddy poll. However, 38% of respondents to the survey – about the same as last year – say that current gasoline prices will affect their travel decisions.

The price of gasoline has skyrocketed this year, as oil prices have risen by about 40% compared to last month, fueled by reduced supply and better than expected demand. Oil accounts for 50 to 60% of the price at the pump.

The drivers also had to pay more because of disturbances in the country's refineries, where crude oil is converted into gasoline, diesel and other products.

"Part of the increase was due to very high prices on the West Coast due to an extraordinary number of refinery shutdowns," said Andrew Lipow, president of Lipow Oil Associates. "With the return to service of these refiners, prices have fallen."

Oil prices plunged nearly 8% this week as the ongoing trade war between the United States and China raises concerns about economic growth and fuel demand. But as tensions in the Middle East continue to simmer and threaten to drive up crude oil costs, the average price of gasoline at the national level is expected to remain stuck at nearly $ 2.80 a gallon, according to Lipow. .

DeHaan expects gasoline price relief to continue at least during the first week of June, with the national average setting between $ 2.65 and $ 2.00 a year. $ 90 per gallon.

The regions likely to experience the largest declines are those with the highest gasoline prices: the west and east coasts and the Rockies.

Higher gas prices have been particularly painful in California and the western Rocky Mountain states. Refinery outages have boosted pump prices to more than $ 4 per gallon in California and over $ 3 per gallon in western states.

"I think we end up being cheaper as a country, but it's not very comforting for California citizens who are going to pay a lot more," said Tom Kloza, Global Head of Analysis. of energy at Oil Price Information Service.

Gasoline inventories in the United States are at their lowest for this time of year since 2015, but analysts say the amount of fuel stored is enough for the country to be well stocked during the summer.

Barring a series of refinery outages or significantly higher oil prices, the onset of the hurricane season is the second major threat to US gasoline prices. The annual storm season poses risks for the US refinery center, especially on the Gulf Coast.

On Thursday, the National Oceanic and Atmospheric Association predicted an almost normal Atlantic hurricane season this year. According to NOAA forecasts, there will be 9 to 15 named storms between June and November, with 4 to 8 hurricanes and 2 to 4 major hurricanes.

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