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Gas prices are surging, with the national average now at the highest in nearly a decade. The rapid ascent is pinching consumers’ pockets, and experts say there may be little end in sight.
The national average for a gallon of regular gas stood at $3.83 on Friday, according to data from AAA, the highest since September 21, 2012. Prices are rising at a fast clip — Friday’s average is nearly 11 cents above Thursday’s. Americans are paying about 27 cents more per gallon than last week, and 41 more cents than a month ago.
In some places consumers are paying a lot more. In California the state average is now $5.07 per gallon.
The jump in prices has become a headache for President Joe Biden, and the White House has been saying for months that they’re working to combat high prices.
The spike follows a surge in oil prices. West Texas Intermediate crude, the U.S. oil benchmark, topped $116 per barrel Thursday, the highest level since 2008. Russia’s invasion of Ukraine and the subsequent sanctions levied against the nation’s financial sector are prompting fears of supply shortages in what was already a tight market prior to Russia’s war.
More than 50% of the cost of gasoline is based on the price of oil, according to the U.S. Energy Information Administration. Costs associated with refining, distribution, marketing, and taxes make up the rest of the price of gasoline.
As the adage goes “the cure for high prices is high prices” and experts say that demand destruction — in the form of high prices — might be the only thing to quell the surge in oil prices.
Wells Fargo pegs that number at $130 per barrel of oil or $4.60 per gallon of gasoline
Patrick De Haan, head of petroleum analysis at GasBuddy, said the national average could top $4 later this month.
“The fallout from Russia’s oil production or lack thereof is likely to continue impacting us as we head to the peak of summer driving season,” he said Thursday on CNBC’s “The Exchange.”
Gasoline futures settled about 8% higher on Friday, after jumping to the highest level since July 2008 during the session.