Gas prices have climbed 13 cents over the past week and stand well above the recent low of $4.07 a gallon.
Prices at the pump were already high heading into 2022 as supply failed to recover from Covid-19 as fast as demand. Russia’s late February invasion of Ukraine sent them surging much higher as investors braced for oil supply disruptions caused by the war and embargoes on Russian energy.
The Biden administration responded by unleashing a record amount of oil from US emergency oil stockpiles, a step that helped cool oil and gasoline prices off.
Here comes $4.50 gas?
The recent jump in pump prices may not be done.
Gasoline futures settled at record highs on Friday. Andy Lipow, president of Lipow Oil Associates, told CNN he expects retail prices will climb by another 18 to 20 cents over the next 10 to 14 days, hitting a fresh record of $4.50 a gallon.
In another blow to the inflation outlook, diesel prices are spiking.
The national average for diesel hit another record of $5.54 a gallon on Monday, up 22 cents in a week and 49 cents in a month, according to AAA. Diesel powers the trucks that haul goods around the country and high transportation costs will likely get passed along at least in part to consumers.
Europe debates banning Russian oil
The good news is that the oil market, which sets the pace for gasoline and diesel, is taking a breather. US oil fell 2% to $107.54 a barrel in recent trading Monday morning. Brent fell 1.7% to $110.42 a barrel.
However, oil prices remain high and the fallout from the war in Ukraine continues to cast a shadow over the energy market.
Rystad Energy warned Monday that a European embargo on Russian oil will “trigger a seismic shift” in energy markets and push oil prices higher in the short to medium term.