Gasoline prices hovering at all-time highs appear to be curbing some demand, but the cost for driving fuel is expected to stay high well into the summer.
“We are seeing demand that is certainly not as strong as it was prior to COVID in 2019 when prices were much lower. I don’t think that’s going to change,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Finance Live this week.
Still, he added, “We’re not in a record-setting summer when it comes to consumption, but we are at a record-setting summer for prices.”
Gas prices in the U.S. hit a new national average of $4.60 per gallon on Thursday, over a dollar more expensive than it was when Russia invaded Ukraine on Feb. 24, according to AAA.
“That sent shock waves through the oil market that have kept oil costs elevated. Domestically, meanwhile, seasonal gas demand is rising as more drivers hit the road, despite the pain they face paying at the pump,” AAA spokesperson Andrew Gross said in a statement on Monday.
De Haan also partly attributes rising fuel prices to reduced refining capability in the U.S. West Texas Intermediate crude futures shot up from about $91 to $123 since Russia’s invasion. On Thursday, WTI (CL=F) was trading above $114 per barrel. Brent (BZ=F) was hovering above $117.
“Even an end to the war in Ukraine doesn’t necessarily rubber stamp price relief here in the U.S,” De Haan said. “I think the best outcome that would bring most meaningful relief is out of [our] control. It may be in the Russian hands, and that’s regime change.”
If Russian President Vladimir Putin is no longer in power, he said, it “may give confidence that Western companies and countries can start doing business and buying that Russian oil again.”
In the meantime, gas prices could continue to soar here in the U.S. As Yahoo Finance’s Rick Newman pointed out, gas prices actually haven’t hit a record high yet, if you account for soaring inflation. Gas prices in 2022 terms would only exceed the 2008 record of $4.16 if they went higher than $5 a gallon.
Ines is a markets reporter covering equities. Follow her on Twitter at @ines_ferre
Read the latest financial and business news from Yahoo Finance