Here we go again. Rising oil prices are hurting the pumps in much of the United States
Oil prices have climbed 30% since the beginning of July, according to Yahoo! Finance, which raised new concerns about their possible impact on consumers’ pockets, the interest rate policy of the Federal Reserve and the trajectory of inflation, which manifested itself in August due to a 10.6% increase in gasoline prices.
Rising gas and grocery prices appear to be weighing on Americans according to the Conference Board’s consumer confidence index for August, which erased gains from the previous two months.
Energy prices also remain a concern for the Federal Reserve’s policy committee, whose interest rate increases since March 2022 have attempted to rein in the prices of everything we buy.
“Higher energy prices may affect spending,” Fed Chairman Jerome Powell said Wednesday afternoon after the Fed left interest rates unchanged. “Over time, a prolonged rise in energy prices can affect consumers’ inflation expectations.”
How much have gas prices increased this year?
Unleaded gasoline prices have increased nearly 20% to $3.88 since the start of the year, according to AAA. But they are still more than a dollar per gallon lower than last year’s high of $5 in mid-June. Diesel prices have fallen by around 2% this year, but also rose sharply in August.
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Why are gas prices increasing?
Over the past few decades, pump prices have closely tracked changes in oil supply, according to the Energy Information Administration. Gas prices generally increase as oil supply decreases. This often happens when oil production is reduced or there are delays at refineries or along gas pipelines, restricting supplies and driving up oil prices.
So far, what U.S. consumers pay at the pump has not fully offset this summer’s rise in oil prices.
“Pump prices appear to be defying predictions at the moment, despite the rising cost of oil,” Andrew Gross, a spokesperson for AAA, said in a statement. “This difficult balancing act could last until we are past hurricane season. »
Factors Playing a Role in Rising Oil and Gas Prices
◾ Saudi Arabia and Russia further reduced their crude oil production, which helped push barrel prices above $90 in September. The Saudi Press Agency said the country would monitor oil price developments in the coming weeks and could potentially cut future production targets.
◾ Extreme summer heat made it harder for refineries to produce enough gasoline to meet demand and drove up prices at the pump, according to Tom Kloza, global head of energy analysis at Oil Price Service Information.
Highest gas prices in the United States
According to GasBuddy.com, the average price of gasoline nationwide increased for the second week in a row, up 4.6 cents from the previous week, to $3.88 per gallon on Monday. Los Angeles has the highest price for unleaded, at $6.07, while Albany, Ga., has the lowest, at $3.19 per gallon, according to AAA.
SOURCE Associated Press, US Energy Information Administration, AAA.com and Gasbuddy.com
CONTRIBUTOR Jim Sergeant/USA TODAY