Americans are feeling pain at the gas pump again, and consensus is rising that the pain won’t be easing anytime soon. If traders, analysts and industry executives are right, consumers could be looking back on the current AAA national average price of $3.54 (as of March 28) with nostalgia in a couple of years.
Upwardly mobile gas prices are nothing unusual at this time of year. They almost always rise as refineries make the changeover from winter gas blends to the far more numerous summer blends mandated by EPA haze regulations, and many undergo periodic maintenance to be ready for the summer driving season to come.
This year, the upward pressure on prices is more intense thanks to global events and market factors creating a kind of perfect storm in the near term, and an even more difficult supply and demand outlook for the longer term.
Shipping disruptions – Ongoing attacks by Yemen’s Houthis on shipping traffic moving into and out of the Red Sea continues to deny container ship and oil tanker traffic access to the Suez Canal, forcing the ships supplying the North American and European markets to take the long way around Africa. This raises shipping and supply costs on the industry that end up being passed through to retail customers at gas stations.
INTERNATIONAL WATERS RED SEA, YEMEN – NOVEMBER 20: This handout screen grab captured from a video … [+]
HOUTHI MOVEMENT VIA GETTY IMAGES
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