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The average price for a gallon of gas in the US has risen for the fifth day in a row after interest rates set by the Federal Reserve rose to 3.25 percent amid fears of a global recession.
On Sunday, the price of a gallon of gas was benchmarked at $3,714 per gallon, the AAA reported.
Oil prices have only risen since Wednesday morning, when the price per gallon rose dramatically to $3,681 a gallon from $3,674 a day earlier.
A 99-day run of falling gasoline prices — one that gave consumers a glimmer of hope that red-hot inflation might cool down — ended last week, with pump prices still much higher than a year ago.
The national average price for a gallon rose by less than a cent to $3.68 a gallon on Sept. 20, according to AAA. That’s below the all-time high of $5.02 in mid-June.
U.S. gas prices rose to $3.71 for the fifth day in a row on Sunday, just over a week after the country’s gas prices rose to $3.68 for the first time in nearly 100 days, marking an end to a historic streak. falling prices driven by stronger supply and weaker demand for fuel
The 99-day drop – spurred by ongoing supply chain problems and the war between oil-rich Russia and Ukraine – pushed prices up to $10 in some states and a record national average of $5.02 in June, before the last increase since September 19
The question now is whether Sunday’s surge will continue the trend of rising oil prices for the rest of the month and early October, or whether the price cuts seen in August and most of September will be reversed.
The answer matters to motorists and to President Joe Biden, who has taken credit for lowering prices by taking millions of barrels of oil from national reserves.
The 14-week price drop was the longest streak since 2015.
Gasoline prices tend to reflect trends in global oil prices, and crude oil – both the US benchmark and international Brent – has been collapsing since mid-June amid growing fears of a global recession that would reduce energy demand.
Many energy analysts believe that prices will rise rather than fall in the coming months.
Changes in sentiment about the economy, the Russian war on Ukraine and even the hurricane season – always threatening the disruption of refineries along the Gulf Coast – make forecasts uncertain.
“I suspect we will see choppy gasoline prices through the end of the year, with several days of falling and rising,” said Tom Kloza of the Oil Price Information Service. He predicted the next set of price hikes will be early next year, driven by investors, speculators and “the fear that there won’t be enough fuel to get by.”
Phil Flynn, an analyst with the Price Futures Group, said prices will rise once withdrawals from the US Strategic Petroleum Reserve — a million barrels a day for six months — end this fall.
“The market is going to price that in, and refineries aren’t going to take this cheap oil out of reserve,” Flynn said. “There is a good chance that we will see a significant price spike for oil in the winter.”
On September 22, a price sign can be seen at a gas station in California. The state average, along with several others, is just under $6 and rose 26 cents to $5.76 after it listed for $5.50 on Sept. 21
Increased gas prices and costs for gas and other basic commodities failed to help the Biden administration and Congressional Democrats ahead of midterm deadlines in November
A new ABC News/Ipsos poll finds that 83 percent of Americans say the economy is an extremely or very important issue in determining how they will vote in the 2022 midterm elections — and a majority approve of Biden’s approach to economic recovery , inflation and gas. Prices
Some companies, such as airlines, have been able to pass on higher fuel prices to their customers. Others have not been able to do that.
“We’re hauling for farmers, and we can’t raise[prices]for farmers because they’re having a hard time too,” said Mike Mitchell, co-owner of Mitchell Milk Hauling, which transports about 10 million pounds of milk a year from farms across the country. northwestern Pennsylvania.
The company’s seven trucks use about $20,000 worth of gasoline a month, and the drop in gas prices this summer offered only limited relief.
“Everything else you buy goes up,” Mitchell said. “Every part of the truck has just about doubled.”
Al DeGennaro, a lawyer for Pennsylvania garbage trucker JP Mascaro & Sons, said high gas prices have taken their toll and their unpredictability is difficult to handle.
“It creates uncertainty about how you’ll bid in the future … many government contracts run for three to five years,” said DeGennaro, whose company has a fleet of about 300 trucks.
Energy experts warn that the war between Ukraine and Russia could further increase the price of global energy resources, especially in mainland Europe this winter, as many countries that are part of the EU depend on Russia’s Nord Stream 1
The national average price rose above $5 a gallon — and over $6 in California — in June as economic recovery and increased travel boosted demand for gasoline, and the Russian war in Ukraine spiked oil prices.
The rise in prices caused financial pain for families and political headaches for the Biden administration. With the Congressional midterm elections less than two months away, it’s hard to know whether voters will reward Biden and the Democrats for the recent price drop — down $1.34 a gallon from the June 14 record — or blame them because prices are still well above the $3.19 average a year ago.
In addition to releasing oil from the strategic reserve, Biden urged other oil-producing countries to increase production, and clashed with oil company executives after accusing them of making improper profits as Americans struggled with high pump prices.
“Every time prices fall, they make a round of victory, even though prices are significantly higher than when she took office,” analyst Flynn said of government officials.
US and international oil prices soared above $120 a barrel in June, but have since fallen. On Thursday, West Texas Intermediate crude was trading around $83.50, while the international benchmark, Brent crude, was around $85.54.
Unexpected events can affect gasoline prices. A BP refinery in Toledo, Ohio, was shut down last week after an explosion and fire that killed two workers. There are still a few weeks left in the peak season of the hurricane in the Gulf of Mexico.
The National Oceanic and Atmospheric Administration says the chance of increased hurricane activity this year is 65 percent.