Fuel: Gasoline prices are on fire – rising more than 12%

After falling from a record high of just over $5 a gallon in June 2022, gasoline prices are starting to rise again — and just before the summer season, according to Fortune.

The national average price of a gallon of gas has risen more than 12% since the beginning of the year to reach $3.50, the highest level since last October. Rebecca Babin, senior energy trader at CIBC Private Wealth, warned on Tuesday that consumers should expect further price increases in the future.

Fuel: Gasoline prices are on fire – rising by more than 12%

We're heading into the summer driving season, so I guess so [οι αυξήσεις των τιμών] “They will continue,” he told Fortune. “Will it be a crazy rise like the $5 gasoline price that we were talking about not last summer, but the summer before that? I don't think so. But I think we will go higher.”

Patrick De Haan, head of petroleum analysis at Gas Buddy, echoed those comments in a post on X.com on Tuesday morning. “With oil prices also reaching their highest levels since November, we will likely continue to see natural gas prices rise,” he wrote. “Right now, there's enough money to get to about $3.60 a gallon.”

The oil stings, and the pumps catch fire

The recent rise in natural gas prices in the United States is essentially a feature of rising oil prices around the world. Despite the war in Ukraine, the ongoing Red Sea crisis and crude oil production cuts of 2.2 million barrels per day by OPEC+, oil prices have remained under control until recently. But they rose to the highest level in four months amid Ukrainian drone attacks on Russian oil refineries that shut down 1% of global crude oil refining capacity – and the International Energy Agency's recent upgrade to its forecast for global oil production.

There are many variables

Winter is also usually maintenance season for crude oil refineries, meaning lower gasoline production, which could lead to higher prices. The good news is that De Haan said he saw “positive evidence that refinery production is starting to pick up,” a sign that the maintenance period is coming to an end. “For now, natural gas prices will likely continue to rise, but the fever may end soon,” he wrote.

However, CIBC's Babin warned that there are a number of potential issues on the horizon that could cause volatility to return to oil and gasoline prices, from wars in the Middle East and Europe to OPEC+'s willingness to slowly cut production at a moment's notice.

“There are a lot of variables at play now. I would caution against getting complacent and thinking that we're back to this normal environment.” “There are a lot of little things that can happen at the edges here that can change the picture dramatically, very quickly.”