ST. LOUIS — For the first time gas prices average at least $4 per gallon in every state, and analysts think they could stay high for the rest of the year.
GasBuddy Petroleum Analyst Patrick De Haan said the reason behind rising prices is a perfect storm of sorts impacting the market.
“Oil prices continue to go up,” said Patrick De Haan. “Gasoline consumption is up. Inventory is down. Basically, all of the ingredients to push up gas prices are doing just that.”
So why is it that gas prices seem to make large jumps of up to 30 cents in a day and take weeks to drop more than a few cents at a time when oil prices plummet?
“There’s often a lag time,” said De Haan. “Stations don’t raise the price until 3-4 days after and that means they lose money for 3-4 days. It’s also why prices don’t come down as quick. Especially in this volatile atmosphere stations don’t want to lower their price 10 cents and watch the price go up 20 cents tomorrow.”
The problem comes down to simple supply and demand economics and has little to do with politics.
“President Trump, President Biden, any president might like to say, ‘Oh I have control over this,’” said De Haan. “Really as Americans, and as a global economy, consumers have more input than politicians do by how often they fill up their tank.”
De Haan said gas inventory has dropped by more than 5 million barrels which may make you want to tap the brakes on any travel plans.
“We’re going to be stuck with prices that most people would consider very high and elevated probably through the summer and through the fall,” said De Haan. “The wildcard is really Russia and Ukraine. If there’s a resolution there we could see improvement, or if there’s an economic slowdown or recession, and nobody can cheerlead for that.”
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