Gas prices are likely to slowly rise nationwide as the price of oil nears its highest level in seven years, according to an industry analyst.
Over the next two weeks, prices will likely rise in “most areas of the country,” Patrick De Haan, head of petroleum analysis for GasBuddy, told FOX Business. However, the Great Lakes region “is likely to notice more pain before other areas,” he added.
Oil prices jumped Monday after OPEC and allied oil-producing countries stayed with their gradual approach to restoring output slashed during the pandemic, agreeing to add only 400,000 barrels per day in November. West Texas Intermediate crude oil hit a seven-year high, up $1.45 at $79.07 a barrel on Tuesday.
“With wholesale gas prices up significantly, we already saw prices yesterday jump in Indiana,” De Haan said, noting that prices will rise soon in Michigan, Ohio, and areas of Illinois as well.
De Haan previously tweeted that prices already appeared to be rising to $3.29 per gallon in areas Indiana. According to De Haan, large jumps are common across the Great Lakes due to a behavior called price cycling. This means that prices in the region usually “rise or fall the fastest compared to other regions,” he added.
However, drivers across the country are already seeing a surge. The average price for gas in Los Angeles has already notched its highest, $4.42 per gallon, since 2012, according to De Haan, who noted that prices will likely continue to rise. On top of that, unusually high prices for natural gas are pushing some electricity producers in Asia to switch from natural gas to oil-based products, “which is supporting oil prices,” De Haan said.
National average gasoline prices have been holding steady at around $3.20 per gallon in recent days, according to AAA. The average is 97 cents more than a year ago.
Additionally, De Haan said it’s “becoming more unlikely that we see any seasonal relief as we traditionally do.” Currently, there is a stronger demand for oil products like gasoline and jet fuel due to the fact that driving and flying picked up around the globe after coronavirus-related restrictions eased.