Gasoline prices are increasing once again, rising an average of about 40 cents over the past month.
The average gasoline price in the U.S. was $3.48 per gallon on Wednesday, up from a month prior, according to the American Automobile Association. Prices rose about 12 cents from their $3.36 average last week.
Analysts have attributed the latest jump, which is still down significantly from summer’s peak average of more than $5 per gallon, to both an increased demand for oil and refinery issues.
“We’re still cheaper than we were three months ago,” noted Patrick De Haan, head of petroleum analysis at price site GasBuddy. “The rebound, while notable, hasn’t been too significant yet. I think we’ll get there though.”
He predicted that in March or April, the national average could grow to $4 per gallon, something he previously didn’t expect until May.
The price increase has been largely attributed to increased demand for oil, in light of China reopening its economy after years-long, strict pandemic controls.
The International Energy Agency recently said that the country’s lifted restrictions were expected to fuel record oil demand.
De Haan said that China’s move was “rather unexpected” and that it will “likely have a profound impact on oil consumption.”
“Chinese flights are already soaring,” he said. “You start loosening restrictions on people and they are making up for lost time just as Americans did.”
Domestically, the country’s refining capacity dropped off after a winter storm hit large parts of the country last month – playing a major role in the price.
“We had a pre-Christmas freeze throughout the country that knocked out a lot of refining capacity,” said Andrew Lipow, president of Lipow Oil Associates.
He noted that at a certain point, more than 20 percent of the country’s ability to refine oil went offline, “which means that we couldn’t make gasoline and diesel fuel … at a time of year when we would expect inventories to build.”
While only about 15 percent was offline as of mid-January, refineries are also expected to begin seasonal maintenance, which could take more offline, the analysts said.
Lipow predicted that in the next few weeks, prices could rise about 5 to 10 cents per gallon, and could go even higher in the spring and summer driving season.
