U.S. shale has significantly reduced…
An OPEC deal extension appears…
The average price of gas is now hovering at a cost that is rather unattractive to drivers at $2.22 per gallon, according to AAA. The increase in gas prices is causing drivers—who have enjoyed, up until now a temporary reprieve at the pump—to think twice about traveling.
The average price of gas in the United States is now at $2.22, up 8 cents over last week, hitting a 6-month high. This, in stark contrast to February’s ultra-low gas prices of $1.68 per gallon—a level that had not been since the end of 2008.
Then, the price drop lasted only five months from December 2008 to May 2009 when it rose to $2.24 per gallon.
This time around, prices dipped to $1.95 in December 2015, rising to $2.03 in April, then to today’s $2.22. The national average has remained above $2 per gallon for 40 consecutive days.
Related: The Merger That Could Create a New Oil Major
Experts are predicting that our gas-price vacation is all but over, and that today’s higher prices—or even higher—will be our new norm once again.
According to GasBuddy analyst Patrick DeHaan, “Gasoline prices may continue inching up until Memorial Day–a major test if refiners are well-prepared for the summer driving season.”
Although the price increase comes as a shock, in the overall scheme of things gas prices are still fairly tolerable, and far better than the $3.00+ per gallon seen in 2011 and continuing well into 2014.
Related: Halliburton-Baker Hughes Merger Officially Dead
U.S. drivers should be prepared for price hikes in the coming weeks, particularly leading up to Memorial Day.
The really savvy price shoppers who want to hedge their bets could pre-purchase gasoline from websites such as mygallons.com, moregallons.com, firstfuelbank.com, and others.
And just when you start to get bitter about the rising prices, just remember that in May of 2015, the average price of gasoline was $2.58, and in May 2014, it was $3.60.
By Charles Kennedy of Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com