May 1 (UPI) — The U.S. average retail price for a gallon of gas is approaching a point where at least one analyst said last year there may be economic consequences.
The average retail price for regular unleaded was $2.81 per gallon on Tuesday, according to motor club AAA. That’s unchanged from the previous day, but 6 percent, or 16 cents per gallon, more expensive than one month ago.
Geopolitical tensions and a decision from the Organization of Petroleum Exporting Countries to drain the oil market surplus that pushed gas prices below $2 per gallon a few years ago is causing crude oil prices to rise and consumers are feeling the squeeze.
“With refineries well positioned for the summer months, we’re looking for some relief by mid-June, but expect this summer to remain one of the priciest in the last few years as average prices climb close to the psychological $3 per gallon barrier,” Patrick DeHaan, the head of petroleum analysis for GasBuddy, said in a statement.
DeHaan told UPI last year the price of oil would have to reach $75 per barrel and the national average would have to get close to $3 per gallon before there’s a direct impact on the economy. Brent crude oil, the global benchmark for the price of oil, was priced near $74 per barrel early Tuesday.
According to AAA, the price for a gallon of gas could jump another 10 cents in the run up to the long Memorial Day holiday at the end of May.
By region, the West Coast is the most expensive market in the country, with Oregon setting the low-water mark at $3.19 per gallon. Oregon’s state average is up 43 cents per gallon from last year. Regional stockpiles of gasoline, meanwhile, are down for their fifth week in a row.
The Great Lakes region is the most volatile and most expensive, with Michigan giving the West Coast a run for its money with a $2.92 per gallon average. The region is vulnerability to the concentration of refineries there and, last week, the situation was compounded by a fire at a Husky Energy plant in Wisconsin.
The consumer price index, a gauge of how much people spend on everything from soda to socks, was up 2.4 percent for the 12 months ending in March. The same metric for gasoline was up 11.1 percent.