Motorists in San Antonio are sighing a slight relief at the pumps even as the nation grapples with rising gas prices that are hitting a four-month peak. According to FOX San Antonio, average gas prices in the Texas city are at $2.84 per gallon which notably dips below Texas' overall average of $2.93, and well beneath the national figure of $3.40 per gallon.
Experts are telling drivers not to yet panic, as it's the season for gas prices to take their annual hike. The shift from the winter chill often sees a surging demand for fuel which coincides with the switch from winter to summer fuel blends—a more expensive concoction. This is a trend just beginning to take hold in most states, as noted by AAA. Still, some financial sharks are wary that this rise might upend the Federal Reserve's simmering plans to cut down interest rates in the coming months, and question whether this will dent President Joe Biden's economic strategy.
Despite the potential for economic turbulence, analysis from Bespoke Investment Group via a CNN report suggests calm seas ahead. "Given that history," Bespoke's Paul Hickey wrote, "this year’s increase doesn’t seem so extreme or worrying." He goes on to clarify that we'd have to witness a "much larger" jump in prices before it would concern the Fed's scaling back on rates. With only a 9.2% year-to-date increase in prices, things remain largely within the realm of the regular springtime rise.
Some of the upward pressure on prices is due to January's extreme cold which knocked several refineries off kilter. Key operators like the Whiting refinery in Indiana felt the cold's sting, leading to fuel production constraints. As a result, drivers in areas like Michigan and Illinois saw pumps tick up by approximately 43 to 47 cents, as CNN reported.
Fortunately for consumers, refinery health is on the mend with utilization rates on a strong upward trend in March. Also, despite the geopolitical teeters in oil-producing regions, crude oil prices have stagnated around $80 a barrel. With these factors in play, industry insiders like GasBuddy's head of petroleum analysis Patrick De Haan project national average gas prices to stay below the $4 mark this year, barring any unexpected catastrophes.
Moreover, the late winter surge might even anticipate an earlier peak in prices which could mean some respite by Memorial Day. De Haan predicts, "prices should be starting to fade" as we edge closer to the election season. This presupposes that the market follows its cyclical trend downwards come fall, and the political landscape remains steady.
