Drivers in California are currently grappling with the most expensive gas in the United States as they shell out an average of $6.06 per gallon as of May 20.
That could soon be the fate of drivers in the rest of the country, according to an analyst from JPMorgan, who predicts the national average per gallon price could reach $6.20 in August.
Gas Prices in the US are At An All-Time High
The $6.06 per gallon price represents a more than 30% increase from the current national average of $4.59 per gallon, according to AAA.
Consumers are already spending thousands more every year on gasoline due to the surge in prices at the pump, with the typical household now spending around $4,800 on gas every year. That is a 70% increase from 2021, according to Wall Street economist Ed Yardeni.
However, more pain could be in store for drivers as the summer travel season starts, according to JPMorgan commodities analyst Natasha Kaneva, who predicts a cruel summer ahead.
Also Read: Gas prices hitting new summer low, it's day trip time
In May 17, Kaneva said that with expectations of strong driving demand, the US retail price could increase another 37% by August to a $6.20 per gallon national average, according to CBS News.
This is because traditionally, the US summer driving season begins on Memorial Day, which lands on May 30, and lasts until Labor Day in September.
Kaneva expects fuel costs to keep increasing due to the lower supply and higher demand. Refineries usually produce more gas in anticipation of a pickup in driving during the summer.
However, gas inventories in the United States are falling and now sit at their lowest seasonal levels since 2019. Kaneva added that gasoline balances on the East Coast have been even tighter, drawing to their lowest levels since 2011, according to CNET.
The reason for the drawdown in gas inventories is an increase in exports, mostly to Latin America. If that continues, the gasoline inventories could continue to draw to levels below 2008 lows, and retail gasoline prices could climb to $6 per gallon or even higher.
Gasoline Inventory in the US
The US is projected to produce around 9.1 million barrels of gasoline every day this 2022 through refineries and imports, but demand is expected to increase to 9.7 million barrels every day by August, according to KTVQ.
That means that inventories are likely to draw down even more. The result will be average gas prices of $6.20 per gallon of gasoline.
Kaneva's prediction is just one view of where the market is going, and it is dependent on the usual summer trend of Americans getting behind the wheel on vacations and road trips.
Motorists aggrieved by high fuel prices could cut back on driving, putting a halt on fuel demand.
Other analysts, like GasBuddy's petroleum analyst Patrick De Haan, said that they don't see the gas prices hitting $6 in other states.
On Thursday, May 19, De Haan wrote on Twitter that the $6 per gallon is not a guarantee. He said he doesn't see the gasoline price getting to that price range.
This is *not* a guarantee. Personally, I just don't see the stars aligning to see the national average get to the $6/gal level. However- there's little margin for error. $5 is a strong possibility. But $6? Not impossible. But improbable. For now. https://t.co/NcIuQj45Dn
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) May 19, 2022
In March, Lyft added a fuel surcharge due to the high gas prices.
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Written by Sophie Webster
