Americans hitting the road over Memorial Day weekend were greeted by record gas prices, with the average cost of a gallon of fuel hitting $4.62 nationwide.
Motorists in California felt the strongest pinch on Monday, with some gas stations in parts of Los Angeles, the San Francisco Bay Area and the Yosemite area charging more than $7.25 a gallon, or more than the federal minimum wage.
On average, gas in the Golden State costs $6.15 a gallon, more than in any other country, according to AAA. Californians are saddled with higher prices due to taxes and surcharges that are added to the base cost of fuel.
The national average, meanwhile, represents an increase of 40% compared to the beginning of the year. It is also well above last year’s level of $3.04 per gallon.
Analysts expect more states to cross the $5-a-gallon average by the July 4 holiday as demand is expected to rise while supply remains tight.
“I don’t think a lot of people are going to hit the road, and if they do, I think a good chunk is going to stay close to home,” oil analyst Patrick De Haan told CNBC. at GasBuddy.
“They should definitely be a noticeable bump, but I feel like people don’t drive that far. The concern is the high prices which bring people a little closer together. »
De Haan added: “There is also working from home which has changed things. There is a significant subset of people who can basically work all the time on the road. »
World oil prices also continue to climb. Brent, the international benchmark, rose above $120 a barrel, hitting a two-month high.
West Texas Intermediate, the US benchmark, hit over $116 a barrel on Monday.
Rising demand following the lifting of coronavirus containment measures and the ongoing Russian invasion of Ukraine weighed on oil markets.
The European Union is meeting on Monday and Tuesday to discuss a sixth sanctions package against Russia following its invasion of Ukraine.
EU countries failed to agree on an import ban on Russian oil despite last-minute haggling ahead of the start of the summit in Brussels on Monday.
But the leaders of the 27 EU countries will accept an oil embargo in principle, draft conclusions from their summit showed, while leaving the practical details and difficult decisions for later.
With post wires