Economic experts are warning Americans across the country will soon be paying $5 for a gallon of gas due to impacts from Russia’s war with Ukraine.
Patrick De Haan, head of petroleum analysis at GasBuddy, says fuel prices are up an astounding .20/gal from just one week ago. Industry data shows that’s a full dollar higher than the same time last year.
De Haan noted yesterday that San Francisco has already become the first city in US history to breach the $5 a gallon line.
According to CBS News, it wont be long before other cities see the same:
Oil prices surged another $7 per barrel on Wednesday after an agreement by the U.S. and other major governments to release 60 million barrels from their national reserves — half of them U.S. barrels — failed to quell supply concerns over Russia’s attack on Ukraine.
The decision made by the 31 member nations of the International Energy Agency to release oil from emergency stockpiles was intended “to send a strong message to oil markets” that there will be “no shortfall in supplies” as a result of the invasion of Ukraine, but failed to move markets.
Oil traders were not impressed. “Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized,” Tan Boon Heng of Mizuho Bank said in a report. “Russia pumps more than that in just six days.”
Despite the sharp increase in gas prices causing a drag on consumer spending, analysts for now do not see the latest surge in oil prices as an immediate danger to U.S. economic recovery.
“While sustained higher energy prices pose downside risk to the outlook, we do not see them as enough to derail the recovery,” investment bank Barclays found in a March report.
“Fortunately, the shock to energy prices is hitting when the U.S. economic recovery is on relatively solid footing, with many states removing restrictions on activity as vaccination rates increase and COVID cases decline, and labor markets displaying notable resiliency in the face of the Delta and Omicron variants,” economists wrote.
Their broad economic outlook does nothing to reassure the millions of Americans who continue to struggle with inflation.