The surge is expected to push gasoline prices up even higher and worsen inflation rates across the economy that are already rising.
U.S. oil prices shot above $90 a barrel for the first time in 10 months, a bad sign for the Federal Reserve.
The surge in oil prices is expected to push gasoline prices up even higher and worsen already rising inflation rates across the economy.
The latest jump in energy prices is beginning to reverse some of the efforts made by the central bank in its fight against inflation, which accelerated to 3.7 percent in August.
Prices at the pump are nearing their record high for the year, even though there has been a major drop in demand.
Despite the end of the peak summer driving season, gas prices, which were already a factor in pushing up inflation in August, will likely continue rising through next week because of the spike in oil prices.
Gas Rises as Oil Costs Soar Above $90
The national average for regular gasoline rose to $3.86 a gallon on Sept. 15, according to AAA, a six-cent jump from last week and 16 cents higher than the same day in 2022.
The same day, Brent crude, the global standard, traded above $94 per barrel, while West Texas Intermediate crude neared the $91 per barrel mark.
At least a dozen states have gas prices averaging $4 a gallon or higher, including Colorado, North Dakota, and California.
Two key inflation measures this week, which are closely followed by the Fed, showed fuel prices rise by more than expected in August.
The Bureau of Labor Statistics’ Consumer Price Index report and the Producer Price Index rose last month due to higher gas prices.
The CPI’s gasoline index jumped 10.6 percent in August, up sharply from the 0.2 percent gain in July, led by a 10.5 percent increase in demand.
The energy index overall increased by 5.6 percent last month.
President Joe Biden acknowledged the spike in gas prices, in a press statement on Sept. 13.
“Overall inflation has also fallen substantially over the last year, but I know last month’s increase in gas prices put a strain on family budgets. That’s why I remain laser-focused on cutting energy costs, including by investing in clean energy to bolster our energy security,” said the president.
By Bryan Jung
