Another Day, Another Record For Gas Prices

At some point, gasoline prices will stop rising. Right?

For the 16th consecutive day, the national average price for a gallon of regular unleaded gasoline has closed at a higher price than the previous day.

The national average gas price is now up to $3.88 per gallon, which is roughly 10% higher than a month ago, 20% higher than exactly one year ago, and 26% higher than the national average price on January 1, 2008. And we still haven’t started the summer travel season!

Currently, there are nine states reporting average gas prices in excess of $4 per gallon, with Alaska leading the way at $4.27 per gallon. Wyoming has the nation’s lowest state-wide average price at $3.63 per gallon.

Not to be outdone, the price of a barrel of crude oil touched another record high today in crossing the $135 mark for the first time before finishing the day at $130.81, down slightly from yesterday’s closing price. Since May 1, the price of crude oil has risen nearly 20%, and is up over 30% since the beginning of the year. However, according to many prominent analysts and economists, this may just be the beginning of a prolonged bull market for oil.

One such analyst is Goldman Sachs’ Arjun Murti, who recently reaffirmed his belief that oil will hit $200 a barrel during the next six to 24 months. Considering Murti was one of the first analysts to predict $100 oil – and we’re already nearly two-thirds of the way to $200 – I think it’s safe to say that, unfortunately, Murti’s probably going to be correct.

So, what would a spike in oil prices mean for gas prices? If you go based on an article posted on CNN Money, we could be looking at the very real possibility of $6 gas. The article’s prime example of something that would cause a spike in oil and gas prices was an active/destructive hurricane season. Essentially, the margin between supply and demand is so tight right now that any prolonged disruption in supply – say, a category five hurricane damaging refineries throughout the southeast – would cause gas prices to hit $5 or $6 per gallon, at minimum.

Long story short, it’s probably going to get a lot worse from here on out.

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