Gas Prices May Have Peaked

Oil barrels with downward arrow.

Leading up to a time of year full of summer vacations and road trips to see family and friends, the Energy Information Administration (EIA)  recently stated that 2018 gas prices might have peaked in the last week of June. Regular-grade retail gasoline prices in the U.S. averaged $2.89 per gallon, down from a high of $2.96/gal in late May.

The EIA estimates that gasoline prices will remain lower than the May 28 price for the rest of the year, falling as low as $2.84/gal by September and $2.68 by December. Gas prices can run higher in summer months due to federal and state environmental regulations requiring the use of gasoline with a lower Reid Vapor Pressure, which is the measurement for how readily petroleum evaporates.

This grade of gas is more expensive to produce but helps prevent vapor lock, which can prevent engines from starting. It also reduces the evaporative emissions that can contribute to smog.

Since 2000, gasoline prices have reached their yearly peak during or before June on ten occasions. In some instances where gasoline prices have peaked after the summer, storms or other outages have driven an unforeseen price spike, such as Hurricane Harvey’s impact last September.

Despite the optimistic outlook, U.S. gasoline prices in certain locations have already surpassed $3.00/gal. They currently range from an average of $2.55/gal in Ohio to $3.56/gal in California.

 

Image Credit: Phonlamai Photo/Shutterstock.com

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