Prices at the pump have hit another record high on Monday, the same day President Joe Biden discussed the United States’ and the world’s ‘incredible transition’ away from fossil fuels.
The new nationwide average now at just under $4.60 per gallon, the highest ever recorded by the American Automobile Association (AAA)’s gas price tracker.
The median gas price is above $4 in all 50 states. Energy Secretary Jennifer Granholm said it’s likely to remain there ‘through this year’ during an interview with a local Fox affiliate.
Gas prices have jumped twofold since the start of the year; that could increase another 25 percent if the summer turns out hotter than normal, CNBC reported last week. The report cited a senior analyst from S&P Global Community Insights who noted that natural gas production was not rising fast enough to meet growing demand, which was bound to push prices even higher.
“Asian and European natural gas prices stand at $35 per mmbtu, versus $8.20 per mmbtu here in the United States. Given the underlying fundamentals that have now developed in US gas markets, we believe prices are about to surge and converge with international prices within the next six months,” natural resources investment firm Goehring & Rozencwajg wrote in its latest quarterly market commentary.
The report details the evolution of the current energy crunch in Europe and how it pushed prices to the current historic heights, beginning with the colder than usual end of winter last year, which pushed up demand, leaving inventories lower than normal because Russia was not pumping additional gas on top of its contracted volumes.
AAA predicted last week that 39 million people will travel 50 miles or more from home during the holiday — a jump of 8.3% over 2021. If correct, it would bring travel volumes almost in line with those of 2017.
Volatile crude oil prices are also playing a role in the price spikes.
“We may see prices even going higher, being much more volatile and becoming a major risk for recession for the global economy,” International Energy Agency Executive Director Fatih Birol told Bloomberg TV from the World Economic Forum in Davos, Switzerland.
Nationwide, the highest average price for regular-grade gas is in the San Francisco Bay Area, at $6.20 per gallon. The lowest average is in Tulsa, Oklahoma, at $3.92 per gallon.
According to the survey, the average price of diesel rose 9 cents over two weeks, to $5.66 a gallon.
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