Gas Prices Could Rise 20 Cents a Gallon by August
High demand and a lack of a deal among oil producers to raise production are contributing to the increase.
Gas prices are expected to increase by as much as 20 cents a gallon by August.
July 6, 2021, 11:57 a.m. ET
The price of a gallon of gas
Note: Weekly prices through June 28. Data is not seasonally adjusted and includes all formulations of regular gasoline.
Source: Energy Information Administration
By The New York Times
AAA said on Tuesday that gas prices were expected to increase another 10 to 20 cents through the end of August.
The average price of a gallon of regular in the United States has risen to $3.13, according to AAA, up from $3.05 a month ago. A year ago, as the pandemic kept people home, a gallon of gas cost just $2.18 on average.
The rise comes amid a breakdown in talks among the OPEC and its allies over whether to expand oil production as global demand recovers from pandemic-induced lockdowns. Meetings on Thursday and Friday did not produce a deal, and a meeting slated for Monday did not happen. There is not a meeting scheduled for Tuesday.
“Robust gasoline demand and more expensive crude oil prices are pushing gas prices higher,” Jeanette McGee, an AAA representative, said in a statement. “We had hoped that global crude production increases would bring some relief at the pump this month, but weekend OPEC negotiations fell through with no agreement reached. As a result, crude prices are set to surge to a seven-year high.”
West Texas Intermediate, the benchmark U.S. crude, rose as high as $76.98 a barrel on Tuesday, its highest in more than six years, before dropping nearly 2 percent to about $76.75. Brent crude, the global benchmark, was down about 3 percent to around $74.90 a barrel after having climbed as high as $77.84 earlier.
Americans are also keeping a close eye on Tropical Storm Elsa, which is headed for the Gulf of Mexico and parts of Florida. The storm is unlikely to cause disruptions to Gulf Coast crude and gasoline productions as winds recede, according to AAA.