The gas spike — prices are up 17 cents in the past week alone — will only add to inflationary pressures that have raised recession fears, rocked financial markets and soured Americans’ views on the economy.
Pump prices are up about 25% since Russia’s invasion of Ukraine set off shockwaves in global energy markets.
Still, the latest spike in gas prices will only make today’s inflation problems worse, and for the most part won’t be captured in Wednesday’s closely watched inflation report.
Some analysts fear even higher prices are coming. Andy Lipow, president of Lipow Oil Associates, told CNN on Sunday he expects retail prices will jump to $4.50 a gallon in the next week to 10 days.
Gas prices move with a lag to oil, and the good news is that oil prices fell sharply Monday, perhaps taking some pressure off pump prices.
US oil tumbled 6% to $103.09 a barrel on Monday, its worst day since late March.
Beyond concerns about China’s Covid lockdowns, analysts said oil dropped because it got swept up in the gloom-and-doom on Wall Street as stocks dropped. Crude prices were just slightly lower Tuesday morning.
Gas prices jump to fresh record highs