(NEXSTAR) – On Monday the surging average gas price in the U.S. reached a new record – and gas is already over $5 a gallon in at least one state – so could we see $6 a gallon in 2022?
While a yes or no answer answer may not be possible, there’s one thing that analysts are tracking as the price of gas in the U.S. explodes higher in 2022.
“Fluctuations in gas prices truly depend on the price of crude oil, which is under several stressors right now,” Ellen Edmonds, public relations manager with AAA, told Nexstar. “This is a fluid situation, so we’re tracking prices daily.”
Amid pressure on the price of oil, partly due to Russia’s invasion of Ukraine, a markets analyst with RBC Capital warned in a recent research note that $6 a gallon is indeed possible if oil continues to skyrocket.
“When we run our statistical models to get to $150 a barrel, that is roughly $5 a gallon at the pump nationwide. Let’s call it 75 cents from where we are now. When we think about $200 a barrel, you are looking at $6 plus a gallon at the pump,” Michael Tran said in an interview on Yahoo Finance Live.
Tran said the likelihood of reaching $200 a barrel isn’t “unfathomable” if Russia’s oil production is widely shunned, there’s no quick replacement when it comes to supply and fear overtakes oil market fundamentals.
“It is not unfathomable for prices to rocket to $200 a barrel by summer, spur a recession and end the year closer to $50 a barrel ($200 call options have been bid),” Tran told Yahoo Finance. Tran clarified that such a situation wasn’t what RBC expects to happen, but it’s not implausible.
“Two weeks ago, such a notion would have been ludicrous,” Tran added. “Brent traded in a $20 range over the past 24 hours. Nothing sounds crazy, anymore.”
Gas prices marching higher
Meanwhile, drivers in states across the country are already wondering if they are going to see $5 a gallon this year.
California, the state with the most expensive gas in the nation, is already well beyond that mark, according to AAA, but that level of pump pain would be a dramatic departure from the norm in other states.
As of early Wednesday, the states clinging to sub-$4 gas prices were grouped in the middle of the country: Mississippi, Arkansas, Kansas, Colorado, Wyoming, North Dakota, South Dakota, Nebraska, Iowa, Missouri and Oklahoma.
Drivers in the states where gas is cheapest haven’t been immune to recent spikes in fuel prices amid the Russian invasion of Ukraine, however. In Mississippi, for example, where the average price is $3.92 as of Wednesday, saw a 62-cent jump from last week alone. Last year, the average price was $2.47.
So will drivers in Oklahoma or Wyoming be shelling out $5 per gallon any time soon? Or in states that already have higher prices, such as Hawaii ($4.77)? GasBuddy analyst Patrick De Haan told Nexstar it’s not imminent in most states and too early to call, but he did say Nevada could potentially see $5 gas in 2022.
“It’s hard to give any assurance on where we’re going, how high we’ll get and when we will get there,” he said while answering questions during a Q&A Monday. “Most of the areas east of the Rockies are at low risk for some of the apocalyptic numbers like $5 and $6 per gallon…This is something that could change very quickly, but I don’t see that in most areas of the country just yet.”
Meantime, De Haan said, drivers should focus on the basics when it comes to fuel efficiency to reduce their personal cost, including driving slower on the freeways and checking their tire pressure.