US Gas Prices Average More than $5 Per Gallon For First Time
June 14, 2022
Crude oil prices rose slightly, but refined fuel product prices fell significantly on a volatile trading day yesterday. Prices started the day much lower due to inflation concerns and a COVID-19 outbreak in Beijing, China. Record high inflation of 8.6% in May is giving the market concern that the Fed may raise interest rates this week by 75 basis points, which pushed the US dollar higher yesterday. The US dollar index rose to a 20-year high, pushing crude prices much lower in trading yesterday.
Geopolitical activities in Libya are again in the news and causing concerns for crude oil supplies. A political faction opposed to the government caused export facilities to close, raising fears about supplies coming out of Libya and supporting crude pricing.
The price of US gasoline averaged more than $5.00 per gallon for the first time on Saturday. According to the AAA, the national average cost for regular unleaded gasoline increased to $5.004 per gallon on June 11 from $4.986 per gallon a day earlier.
The EIA reported the US total shale regions’ oil production in July is forecast to increase by 143,000 bpd to 8.901 million bpd.
US interest rate traders expect the federal funds rate to reach 3.54 – 3.75% by January 2023, up from 0.75 – 1.00% as the central bank attempts to bring inflation under control.