California gasoline prices rose to $4 a gallon for the first time in a year and a half as more motorists hit the road amid easing pandemic restrictions in the most populous U.S. state.
The price of the most expensive U.S. fuel market is up about 10 cents over the past month, according to AAA, amid a rally in crude oil and expanding fuel demand nationwide.Gasoline consumption across the country is on track for its third straight monthly increase, which would be the longest streak since last summer, Energy Information Administration figures showed.
Although California is the only state among the 50 states to reach the $4 mark, the rise can be ill for the rest of the nation.The demand is already at the highest level since pandemic lockdowns began in early 2013 and as more cities and states relax virus restrictions, economic activity that underpins the demand is expected to blossom.
The price shock comes only 12 months after the worst oil rout in history with the price of West Texas Intermediate crude, or WTI crude in negative territory.The local knock-on effect of the current rally could be surging fuel prices across the country.
''Visible at this time, you can recall that crude was at zero", said Jeffrey Spring, a spokesperson for the AAA auto club of Southern California.Now we have WTI over $60, which is at a new level.
At 11: 39 a.m., the gasoline futures climbed 2.4% to $2.0679 a gallon on the New York Mercantile Exchange, pushing the year-to-date advance to 47%.The national retail average was on Wednesday at $2.89, up by 3 cents in the last month.The GasBuddy Analyst Patrick DeHaan said the odds are that national average will soon reach $3 this summer.
The last time CA gasoline reached these levels was November 2019, the AAA data showed.The increase follows the introduction of more expensive summer-specific gasoline for the market, and even higher prices could be ahead with the boom in summer travel starting with the U.S. Memorial DayU.S. Memorial Day holiday.Benchmark futures of US crude are up 33% this year amid a patchwork economic recovery around the world.
The maintenance work expected at a Chevron oil refinery near Los Angeles may tighten the local fuel supplies, further increasing prices.
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