Rising oil costs and heat-induced refinery production cuts have driven gas prices to their highest levels in nine months.
The average price for a gallon of regular-grade gas in the United States reached $3.80 on Wednesday, 26 cents more compared with a month ago, according to data from AAA. It is the highest level since November, though still lower than the peak average of $5 in June 2022.
Hot weather has hurt refinery output, AAA spokesman Andrew Gross said.
“Last June, the prices were a war-induced mania,” Gross said. “Now, prices are a reaction to scorching summer temperatures.”
Refineries aren’t designed to operate in temperatures above 95 degrees, so companies scale back production during heat waves as a safety and efficiency measure. Much of the country’s refinery capacity is in areas of Texas and Louisiana where the average daily maximum temperature in July has been at least 95 degrees.
Weather ultimately will decide whether drivers see financial relief at the pump, Gross said. But the cost of crude oil also has an impact on gasoline prices, Gross and others said.
Oil prices are around $80 a barrel. Crude supply cuts have led to global declines in oil inventories, said Patrick DeHaan, head of petroleum analysis at GasBuddy.
Analysts expect gas prices to ease by October, but hurricane season could lead to more hikes in the short term. In South Florida especially, where water temperatures off the Gulf Coast exceeded 100 degrees last week, the potential for hurricane damage looms large.
“If a hurricane hits that hot Gulf Coast water, that could boost prices on the national level 10 to 30 cents, even if only for a month,” Gross said.
While prices have shot up across the country, drivers on the West Coast are paying the most. California, Washington state, Oregon and Hawaii are the four most expensive states in which to buy gas as of Wednesday, with the average price in those states ranging from $4.63 to $5 a gallon.
Gas in Southern states remains the cheapest, with Mississippi, Texas, Louisiana, Alabama, Kentucky and Tennessee all seeing average prices below $3.50 per gallon. SOURCE.