Gas prices are unlikely to continue their recent tick lower, experts say.
“I think we may have peaked so far for the current hikes in that we are at $4.32 per gallon and we have been there for a couple of days. But there are things on the horizon that mean gasoline prices going higher, namely the summer blends of gasoline which starts tomorrow on the West Coast and has to be completed by mid-April. It’s more difficult to refine, more difficult to distribute. That leaves the prices going up. As the weather gets better, people want to get out of the cold doldrums and take a trip somewhere,” explained AAA spokesperson Robert Sinclair Jr. on Yahoo Finance Live.
Oil prices are off their highs of nearly $139 a barrel on optimism U.S. oil majors such as Exxon and Chevron will produce more to make up for any lost Russian output amidst its war on Ukraine. Even still, oil prices remain above $100 a barrel reflecting the geopolitical risk.
And that continues to light a fire under gas prices, no pun intended.
The national average price of a gallon of gas hit a record high of $4.33 on March 11 before falling a penny and holding throughout the weekend through Monday morning at $4.32, according to the latest data from AAA. At $4.32 a gallon on average in the U.S., gas prices are up 26 cents versus last week and 84 cents higher than a month ago.
A year ago at this time, gas prices in the U.S. were $1.47 a gallon cheaper.
Sinclair said consumers have started to alter their driving behavior amid sky-high gas prices, citing a recent survey by AAA.
“60% of drivers are saying that $4 a gallon is the pain point and they have already made that adjustment [in behavior]. And 75% of drivers said $5 a gallon is the pain point. What would they do in response? Well, younger drivers — those 34 years old and younger — about 23% of them said they would carpool to deal with these higher prices. But the older drivers — 35 years old and above — said they would cut back on spending, going out to dinner and making major purchases for appliances. And they also said they would combine their errands with their commute,” Sinclair explained.