‘Three-dollar gas will be the norm by Memorial Day’: Americans likely to pay more at the pump


Americans who have been cooped up at home over the past year during the COVID-19 pandemic will likely pay $3 a gallon for gasoline when they emerge from lockdowns this summer and resume traveling, economists say.

Motorists in the United States have not paid an average of $3 per gallon since 2014.

As of Tuesday, drivers in California, Hawaii, Washington State, Nevada, Utah, Oregon, Alaska, Arizona, Illinois, Pennsylvania, and the District of Columbia were paying an average of more than $3 per gallon.

California motorists are paying an eye-popping $3.88 per gallon – the highest rate in the country, according to the American Automobile Association. 

‘Three-dollar gas will be the norm by Memorial Day,’ Robert Yawger, director of energy futures at Mizuho Securities, told CNN.

‘We’ve been trapped inside for a year. People want to get out of the house.’

US gasoline prices rose to nearly $2.88 a gallon on Tuesday, their highest since June 2019, data from the American Automobile Association showed

As of Tuesday, drivers in California, Hawaii, Washington State, Nevada, Utah, Oregon, Alaska, Arizona, Illinois, Pennsylvania, and the District of Columbia are paying an average of more than $3 per gallon

As of Tuesday, drivers in California, Hawaii, Washington State, Nevada, Utah, Oregon, Alaska, Arizona, Illinois, Pennsylvania, and the District of Columbia are paying an average of more than $3 per gallon

US gasoline prices rose to nearly $2.88 a gallon on Tuesday, their highest since June 2019, data from the AAA showed.

Prices have not been that high in March since 2014, AAA data showed.

Still, the current price is below a $3 per gallon threshold that is typically seen as a level that impacts consumption.

US gasoline prices have increased because of rising crude prices and a winter storm in Texas this year that forced producers to shut production, said Jeanette McGee, AAA spokeswoman.

US fuel demand is still down more than 10 per cent from the same period last year, data from the US Energy Information Administration showed.

US gasoline consumption is expected to grow to 8.6 million barrels per day in 2021, up from 8.03 million bpd in 2020, according to the EIA, before rising to 8.89 million bpd in 2022.

US fuel demand is likely to increase through 2022.

Prices appeared to be holding steady this week.

Oil prices fell more than 4 per cent on Tuesday, hit by concerns over new pandemic curbs and slow vaccine rollouts in Europe as well as a stronger dollar.

West Texas Intermediate crude (WTI) fell $2.64, or 4.3 per cent, to $58.92, after falling to as low as $58.47 on Tuesday

West Texas Intermediate crude (WTI) fell $2.64, or 4.3 per cent, to $58.92, after falling to as low as $58.47 on Tuesday

Brent crude futures were down by nearly 4 per cent to $62.09 a barrel by mid-day on Tuesday, having hit a low of $61.41

Brent crude futures were down by nearly 4 per cent to $62.09 a barrel by mid-day on Tuesday, having hit a low of $61.41

Brent crude futures were down $2.56, or 4 per cent, to $62.08 a barrel by 12:16pm ET, having hit a low of $61.41.

West Texas Intermediate crude (WTI) fell $2.65, or 4.3 per cent, to $58.91, after falling to as low as $58.47.

Both benchmarks traded near lows not seen since February 12.

‘The road to oil demand recovery appears to be full of obstacles as the world continues to fight the COVID-19 pandemic,’ Bjornar Tonhaugen, head of oil markets at Rystad Energy.

‘Oil prices are declining again on Tuesday, proving that last week’s correction was not deep enough and that the market had been trading lately with an excessively bullish sentiment, overlooking the pandemic´s risk,’ he said.

Extended lockdowns in Europe are being driven by the threat of a third wave, with a new variant of the coronavirus on the continent.

Germany, Europe’s biggest oil consumer, is extending its lockdown until April 18.

Nearly a third of France entered a month-long lockdown on Saturday following a jump in cases in Paris and parts of northern France.

US gasoline consumption is expected to grow to 8.6 million barrels per day in 2021, up from 8.03 million bpd in 2020, according to the EIA, before rising to 8.89 million bpd in 2022. US fuel demand is likely to increase through 2022

US gasoline consumption is expected to grow to 8.6 million barrels per day in 2021, up from 8.03 million bpd in 2020, according to the EIA, before rising to 8.89 million bpd in 2022. US fuel demand is likely to increase through 2022

A stronger US dollar also weighed on prices.

As oil is priced in US dollars, a stronger greenback makes oil more expensive for holders of other currencies.

Physical crude markets are indicating that demand is lower, much more so than the futures market.

‘Physical prices have been weaker than futures have been suggesting for several weeks now,’ said Lachlan Shaw, head of commodity research and National Australia Bank. 



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