It looks like gas prices are leveling off after more than a week of unsettling and sharp daily increases.
The national average for a gallon of regular unleaded had fallen to $4.33 on Monday after peaking Thursday at $4.35, according to price tracking website GasBuddy. Data from AAA shows a similar trend: After the national average jumped 72 cents to a record high of $4.33 a gallon in the first 11 days of March, it held relatively steady through the weekend, and was $4.325 on Monday. (Keep in mind, that’s the national average. State averages were as high as $5.74 in California and as low as $3.82 in Kansas, according to AAA.)
Prices at the gas pump have followed a surge in the price of the crude oil it’s made from. In the wake of the Russian invasion of Ukraine, oil investors have been worried that international sanctions against Russia, a major producer of petroleum, would leave us without enough oil. Oil prices have fallen over the past few days on news that other oil-producing countries in the OPEC cartel might increase production to fill the gap left by Russia. At one point prices fell nearly $10 Monday, dropping below $100 a barrel, after topping $130 last week.
Still, it’s only been a few days and experts warn not to get too hopeful.
“If todays decline in oil holds- most states will likely see a weekly decline at the gas pump in the week ahead,” Patrick De Haan, head of petroleum analysis at GasBuddy, tweeted on Monday, adding, “I do think there is risk we could go higher in the weeks ahead.”
The war is “making it hard to determine” what the peak will be, Andrew Gross, spokesman for AAA, said in a commentary.
The economic impact of high gas prices threatens to reverberate far beyond the pump. Goldman Sachs last week estimated that the U.S. economy now has a 20% to 35% chance of falling into a recession within a year. When gas costs more, drivers are forced to cut back on other things to pay for it, and that throws sand in the gears of consumer spending, the engine that propels the country’s economic growth.
Have a question, comment, or story to share? You can reach Diccon at email@example.com.