Time To Sell That V8: The $5 Gallon Of Gas Is Coming, And Things Are About To Get Worse, Analysts Say

Time To Sell That V8: The $5 Gallon Of Gas Is Coming, And Things Are About To Get Worse, Analysts Say

Americans feeling the pinch at the pump due to rising oil costs should brace themselves for further price rises, according to analysts.

The current national average is $3.61 a gallon, accordant to data from AAA, which represents an increase of around $1 from this time last year, though drivers in some states are paying as much as $4.50 per gallon.

But Patrick De Haan, head of petroleum analysis at price tracker GasBuddy predicted on Feb 28 that fuel would hit an incredible $5 per gallon “in the next couple of weeks.” In fact, we only had to wait three days. On March 3 De Hann followed that prediction with another tweet announcing that San Francisco had the dubious honor of being the first U.S. city to pass the $5 gallon average milestone.

Fuel prices had already been climbing before Russia’s invasion of Ukraine, and that conflict is only making the situation worse. The U.S. and other countries agreed to release 60 million barrels from their reserves, half of those coming from America, to send a message to oil markets that the Ukraine situation wouldn’t result in a shortfall in supplies, but oil traders weren’t impressed.

Related: EPA Protesting New Postal Trucks Over Its New 8.6 MPG Trucks

“Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized,” Tan Boon Heng of Mizuho Bank said in a report. “Russia pumps more than that in just six days.”

“We think the Russia-Ukraine war will intensify global and U.S. inflation pressures by pushing up oil and gas prices,” Brian Coulton, chief economist with credit rating agency Fitch, said in an email to CBS News. So this might not be the perfect time to run out and buy that muscle car you’ve always wanted.

But if it’s any consolation, things are much worse in other countries. My local service station here in the UK sells the equivalent of America’s 93 Octane fuel for £1.52 per liter, which works out at $7.67 per U.S. gallon, and on the motorways it’s over £1.70, or $8.58 per U.S. gallon. To give a bit of context in terms of how far you can drive for your money, that UK motorway price would be like someone in Arkansas, whose $3.21 per gallon average is the lowest in the U.S., getting 5.6 mpg from their Dodge Challenger in normal driving.

H/T to CBS News

Leave a Reply