Crude oil passed $70 a barrel, the highest price since October 2018, according to the American Automobile Association (AAA). Price per barrel has jumped $23 per barrel since January.
The rising cost per gallon of gas stems from the climb in crude prices, especially in light of falling demand and increasing supply, the group said.
“Motorists are paying, on average, 37% more to fill up than the start of the year,” Jeanette McGee, an AAA spokesperson, said in a statement.
“Prices for the rest of the month are likely to push more expensive, but if crude production increases, as forecasted, there is the possibility of seeing some relief at the pump later this summer.”
The U.S. Energy Information Administration is forecasting that rising global production of gas and other fuels will limit price increases for both WTI and Brent crude oil. U.S. production is projected to increase along with global output.
The administration expects Brent crude oil prices to drop to $68 per barrel in the third quarter of this year, fall to $64 per barrel in the following quarter, and decline to $60 per barrel in 2022.
Brent crude was at $73 a barrel on Tuesday.
While production is going up, it’s the first time it’s gone up in a while, “and it’s still not going up as quickly as we would like to see it to cool prices,” Phil Flynn, an energy market analyst with PRICE Futures Group, told The Epoch Times.
“The natural gas traders are saying that they appreciate the extra production, but we don’t know if it’s going to be enough to meet what’s going to be some very strong demand going into the summer,” he added.
Bottom line is, prices will stay high for the near future.