Could Gas Prices in Your State Reach $6? One Analyst Thinks So

·3 min read
Fang Zheng / iStock.com
Fang Zheng / iStock.com

The one thing most Americans had going for them during the current runup in gasoline prices is that they could always say, “Well at least I don’t have to pay as much as they do in California.” But drivers across the United States might soon feel the same pain Californians are feeling right now — $6-a-gallon gas — if demand continues to outpace supply at the current rate.

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Natasha Kaneva, head of global oil and commodities research at JPMorgan, told CNN in a May 17 email that “there is a real risk the price could reach $6+ a gallon by August.”

Her comment came just as the average price of gasoline pushed about $4 a gallon in all 50 states, according to AAA — the first time that’s ever happened. The national average stood at a record high of $4.567 a gallon on May 18. California, which is far and away the most expensive state in which to buy gas, saw its average exceed $6 a gallon.

The prospect of $6-a-gallon gas throughout the country seemed inconceivable not too long ago. But it’s not so far-fetched anymore, with U.S. gas prices surging in the aftermath of Russia’s invasion of Ukraine, compounded by a growing imbalance between supply and demand.

Gasoline inventories in the United States are at their lowest seasonal levels since 2019, CNN Business reported, just as demand is on the rise amid an easing of COVID-19 restrictions and the coming summer travel season.

“With expectations of strong driving demand… [the] U.S. retail price could surge another 37% by August,” JPMorgan analysts wrote in a report titled “Cruel Summer.”

If you’re looking for a silver lining in all of this, keep in mind that average prices aren’t what they charge everywhere. In California, for example, more than half (52%) of stations sell gas for less than $6 a gallon, and nearly one station in four sells it for $5.75 a gallon or less.

Because some stations inflate the average by hiking their own prices, drivers across the U.S. could see some stations at $6 a gallon even if the national average never reaches that high.

Not All Experts Agree That Gas Will Hit $6 Per Gallon Nationwide

Meanwhile, some industry experts sound doubtful that the national average will ever rise as high as $6 a gallon.

“It’s hard to get to $6,” Andy Lipow, president of Lipow Oil Associates, told CNN. “Before we get there, we would have significant demand destruction, not only here, but around the world.”

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Patrick De Haan, head of petroleum analysis at GasBuddy, has a similar take.

“I personally think we’d see a recession before we’d see a national average of $6,” he told CNN, but then added that he “[doesn’t] think much is impossible in this market.”

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