Gas Prices Expected to Surpass $6 per Gallon Nationwide by August: JPMorgan Analysts

Gas Prices Expected to Surpass $6 per Gallon Nationwide by August: JPMorgan Analysts
Gas station employees in Gainesville, Fla., say they keep removing stickers from gas pumps that show President Joe Biden pointing to the price gauge with the words "I did that!" but replacement stickers quickly reappear. (Nanette Holt/The Epoch Times)
Bryan Jung

The average price for a gallon of regular gas nationwide is expected to exceed $6 by the end of summer 2022, after surpassing $4 per gallon in all 50 states on May 17.

Prices could surge another 37 percent by August to an estimated national average of $6.20 per gallon, according to a note from JPMorgan analysts on May 17.

Californians this week are already paying $6.06 for a gallon for gas, with the rest of the nation set to follow.

The news broke less than two weeks before Memorial Day weekend, the unofficial start of the summer season when Americans will be traveling more.

“The high cost of oil, the key ingredient in gasoline, is driving these high pump prices for consumers,” said Andrew Gross, a AAA spokesperson, on May 16.

“Even the annual seasonal demand dip for gasoline during the lull between spring break and Memorial Day, which would normally help lower prices, is having no effect this year,” he said.

The national average price for regular unleaded gas on May 17 was $4.52 per gallon, which is an all-time record according to AAA. This is 3.4 percent higher than the price of $4.37 per gallon one week prior; 10.9 percent higher than the price of $4.08 per gallon one month prior; and 48.5 percent higher than the price of $3.05 per gallon one year prior in 2021.

“Typically, refiners produce more gasoline ahead of the summer road-trip season, building up inventories,” said Natasha Kaneva, head of global commodities research at JPMorgan, but since mid-April, “gasoline inventories have fallen counter seasonally and today sit at the lowest seasonal levels since 2019.”

The national price average hit another record on May 18, reaching $4.56 per gallon, up nearly 50 cents from a month ago, and up $1.52 from the same time in 2021, according to AAA.

The JPMorgan analysts warned that “gasoline balances on the East Coast have been even tighter, drawing to their lowest levels since 2011.”

The price of West Texas Intermediate dropped slightly on May 18 to $109.67 per barrel, while Brent, the international standard, was trading at $110.04 per barrel, according to the U.S. Energy Information Administration.

All of this comes a week after the Department of the Interior announced that President Joe Biden planned to cancel three oil and gas lease sales scheduled in the Gulf of Mexico and off the coast of Alaska, claiming there was a lack of interest in drilling there due to “conflicting court rulings” that have complicated the process.

That decision removed millions of acres of U.S domestic waters from eligibility for offshore drilling for oil and gas.

“President Biden promised to take down American energy during his campaign. Record gas prices are the intended effects of his deliberate actions,” Sen. Ted Cruz (R-Texas) wrote on Twitter upon hearing the latest prices.

But Biden has also blamed oil companies for not producing enough supply to keep prices down, even going so far as to threaten the oil industry with tax penalties for companies with federal leases that are not pumping enough oil.

“Unfortunately, this is becoming a pattern—the administration talks about the need for more supply and acts to restrict it,” said Frank Macchiarola, senior vice president of the American Petroleum Institute, in an interview with The New York Post.

“As geopolitical volatility and global energy prices continue to rise, we again urge the administration to end the uncertainty and immediately act on a new five-year program for federal offshore leasing,” he said.

Naveen Athrappully contributed to this report.