Worried about high gas prices this summer?
It seems like the surge in U.S. gasoline prices may not last as long as initially feared due to easing geopolitical tensions. Concerns over disruptions in oil and fuel supplies have lessened with signs of de-escalation between Israel and Iran, and Russia’s ability to quickly repair damaged refineries. Additionally, U.S. refiners are returning from spring maintenance and increasing fuel production.
The current national average price for a gallon of gasoline is $3.66, which is 4% higher than last month but similar to the price at this time last year.
Analysts had previously predicted prices to surpass $4 a gallon by May, but now there’s optimism for a gentle decline in prices leading up to the Memorial Day holiday, which marks the start of peak summer driving season.
Financial investors have also reduced their exposure to gasoline and other petroleum contracts, reflecting doubts about sustained high energy prices. Hedge funds and other money managers sold a significant amount of U.S. gasoline futures and options last week, possibly due to a decrease in concerns over potential conflicts such as between Israel and Iran. Despite lower gasoline stocks and a slight dip in demand, the overall outlook suggests some relief for consumers at the pump in the coming weeks.
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