Gas prices have jumped up to an eight-month high across the U.S. as some analysts say they will continue to get higher.
The average price for a gallon of regular gas on Friday hit $3.73, while the price for a gallon of diesel hit $3.97, according to AAA. The highest prices ever recorded by AAA were last summer when the cost of a regular gallon hit $5.01 and diesel hit $5.81. On Thursday, gas reached its most expensive prices since November 22.
Prices have jumped over 20 cents in the past week in Iowa, Florida, and Indiana, while 16 states have seen jumps of at least 15 cents, according to NBC News. The high was first reached on Thursday and continued into Friday.
BREAKING: The average price of gasoline in the US has risen to its highest level of 2023 at $3.687/gal.
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) July 27, 2023
Analysts have suggested that decreased oil production and refinery outages have contributed to the increase in prices. Earlier this month, Saudi Arabia announced that it would be decreasing oil production by a million barrels a day for both July and August to aid “the stability and balance of oil markets.” In the wake of the cuts, the price of a barrel of oil has increased to over $80.
Gas Buddy petroleum analyst Patrick De Haan told Barron’s that some refineries in Texas and Louisiana have faced issues over the summer.
“There’s no magic formula to determine the exact impact on gas prices, since factors such as refineries make that relationship more murky,” he told Barron’s. “We were paying well over $4 a gallon when oil prices were $100 [a barrel], but again, refining capacity has been really the elephant in the room that has caused gas prices to have less of a direct relationship with oil since Covid shut down a significant amount of refinery capacity.”
On Thursday, De Haan said that gas prices might approach an average of about $4 a gallon.
“On our current trajectory, it seems the national average could rise to $3.85/gal, and we could even get close to $4/gal on the first potential of a storm aiming for the Gulf,” he wrote on Twitter.
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When President Joe Biden took office, the national average price of gasoline was $2.38 per gallon, according to the Energy Information Administration, and increased to $3.53 per gallon by the start of the Russian invasion of Ukraine.
The Biden administration has consistently blamed gas prices on Russia’s invasion of Ukraine, but the president has faced criticism over his energy policies, in particular his pulling of approval for the Keystone Pipeline and limiting of oil drilling on federal lands.