Fuel prices are breaking records in cities across the country as the national average for unleaded gas creeps toward $5 a gallon. Matt Smith, lead oil analyst for the Americas at Kpler, says things may get worse before they get better.
Highlights from this segment:
– Oil prices, which form the main component of gasoline costs, are close to $120 per barrel. A potential oil embargo on Russia by EU countries, and concerns about OPEC’s ability to increase supply are contributing to those high prices.
– U.S. oil inventories have dropped significantly in the first four months of the year, reflecting the impact of the pandemic, and past hurricane damage to refineries.
– The federal government has already taken actions intended to lower pressure on oil prices. These measures include releasing oil from the Strategic Petroleum Reserve, and providing tax waivers to energy producers. Oil prices are still subject to global economic forces that the U.S. can’t directly influence.
–Prices could continue to rise as summer driving season begins, and as forecasters predict another busier-than-average Atlantic hurricane season.