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U.S. gas prices could soon top $5 a gallon, analysts say

Record-high gas prices affect summer travel
Record-high gas prices affect summer travel 02:00

Motorists hoping for some relief at the pump should think again. 

Gas prices nationally could reach $5 a gallon on average by as early as June 17, according to Patrick De Haan, an analyst for GasBuddy, which tracks fuel costs across the nation. That's up from the current national average of $4.62 a gallon, already a record high, according to AAA. 

Americans are paying record-high prices for gasoline as the summer travel season arrives — an issue that's weighing on consumers as they make their vacation plans more than rising COVID-19 rates, according to a new survey from Morning Consult. At a handful of stations in California, fuel now tops the federal minimum wage of $7.25 per hour.

What's driving prices

A range of factors are combining to keep fuel prices high. That could equate into months of financial pain for millions of U.S. households, with the typical driver spending an annual rate of about $4,800 on gas, up from $2,800 a year ago. 

The benchmark Brent crude oil is now trading at about $118 per barrel, or 71% higher than a year earlier, according to FactSet. Demand from consumers and businesses has spiked as the economy recovered from the initial COVID-19 pandemic, but refineries aren't keeping up with demand.

Meanwhile, Russia's war in Ukraine is pushing prices higher as the U.S. and other nations restrict purchases of Russian energy products. This week, European Union leaders agreed to embargo most Russian oil imports to members of the trading bloc by year-end.

The Biden administration has tried to lower gas prices by tapping the nation's Strategic Petroleum Reserve. But that could only do so much, De Haan noted. 

"There is the temptation to think an American politician can do something, but they don't have control over the global levers of supply and demand," De Haan told CBS MoneyWatch. "Look at the Strategic Petroleum Reserve — that looked like a huge announcement, but prices kept going up."

$6 a gallon by August?

Drivers could be paying an average per-gallon price of $6.20 by August, according to JPMorgan analyst Natasha Kaneva in a May 17 report. 

Like De Haan, Kaneva explained the surge in gas prices by pointing to lower supply and higher demand. Refineries usually produce more gas in anticipation of an increase in demand during the summer. But gas inventories in the U.S. are declining, and now sit at their lowest seasonal levels since 2019, she noted. 

"U.S. consumers should not expect much in the way of relief in prices at the pump until the end of the year," Kaneva predicted.  

Still, only about half of Americans say they're cutting back on driving due to the high cost of gas, according to a GOBankingRates survey

Tips on saving money as prices climb 05:51

One reason that many drivers may not be cutting back: Today's fuel prices are still below their peak in 2008 on an inflation-adjusted basis. In today's dollars, the 2008 price was closer to $5.25 a gallon.

As prices at the pump soar, some U.S. states are trying to ease the pain. Starting June 1, New York will suspend its 16 cents per gallon gas tax through the end of the year. Connecticut, Georgia and Maryland have also temporarily lifted their gas taxes, while other states are considering suspending them. 

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