U.S. gasoline prices hit a new all-time high on Memorial Day, the start of the summer driving season, with the national average exceeding $4.61 per gallon.
On May 30, the national average price of a gallon of regular gasoline was $4.619, according to data from AAA. That’s up from $4.596 per gallon a week ago, $4.178 a month ago, and up from the $3.045/gal average price at this time last year.
Gasoline prices in the United States have been setting all-time highs nearly every day in the past few weeks, adding more pressure to the Biden Administration to try to curb the highest prices on record.
Heading into the Memorial Day weekend, inflation-adjusted—or real—gasoline prices in the United States were at their highest in a decade, at a national average of $4.59 per gallon, the Energy Information Administration said on Friday. On a nominal basis, this price was the all-time high price for gasoline recorded in EIA’s weekly Gasoline and Diesel Fuel Update, which dates back to 1990.
High crude oil prices, the effect of the Russian invasion of Ukraine on the crude and fuel markets, and U.S. gasoline demand exceeding refinery runs are the key factors driving the record-high gasoline prices in nominal terms, the EIA noted.
But there are early signs that high gasoline prices may have started to destroy some demand.
On Thursday before the Memorial Day holiday weekend, gasoline demand was 4.3% higher from a week ago, or 5.4% higher than the four-week average, according to data from fuel-savings app GasBuddy. Considering that it’s just ahead of the holiday weekend, it’s “Pretty lackluster and signs that demand destruction is hitting the Memorial Day weekend,” Patrick De Haan, head of petroleum analysis for GasBuddy, said.
GasBuddy data showed that weekly (Sunday through this past Saturday) U.S. gasoline demand rose by 0.5 percent compared to the previous week and was 1.2 percent above the average of the last four weeks.
“This is quite weak for demand given the Memorial Day weekend,” GasBuddy’s De Haan tweeted.
Going forward, “we’ll likely make a run to $4.75/gal in the next couple weeks barring any major change,” De Haan said on Monday, adding that estimated odds of gasoline prices reaching a national of $5/gal this summer are at 65%.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.