Pain at the pump is back! Average gas prices nationwide RISE by 0.7 cents to $3.68 after 99 days of consecutive decline – sparking fears that Bidenflation is here to stay as Feds prepare to hike rates .75%
- The 99-day decline saw prices rise to as high as $10 in some states, and a record national average of $5.02 in June
- Pump prices have fallen ever since, plummeting for 99 consecutive days to $3.67 on Tuesday – a more than 26 percent decrease
- On Wednesday, however, that reduction reversed, rising by a fraction of a cent to about $3.68 per gallon
- The rise has sparked fears that ongoing inflation is here to stay, as the Fed prepare to hike rates by another .75 – the fourth such increase this year
- The hike, while marginal, puts an end the second-longest such streak in American history, going back to 2005
- It could also mitigate the Fed’s efforts and anticipated pullback in inflation over the coming months
America’s gas prices rose for the first time in nearly 100 days Wednesday, putting an end to a historic streak of falling prices driven by stronger supply and weaker demand for fuel.
The 99-day decline – spurred by ongoing supply chain woes and the war between oil-rich Russia and Ukraine – saw prices rise to as high as $10 in some states, and a record national average of $5.02 in June.
Pump prices have fallen ever since, plummeting for 99 consecutive days to $3.67 on Tuesday – a more than 26 percent decrease.
On Wednesday, however, that reduction reversed, rising by a faction of a cent to $3.68 per gallon, sparking fears that ongoing inflation is here to stay, as the Fed prepare to hike rates by another .75 – the fourth such increase this year.
The hike, while marginal, puts an end the second-longest such streak in American history, going back to 2005.
The increase could also mitigate the Fed’s efforts – and anticipated pullback in inflation – over the coming months, experts say particularly when combined with rising heating oil and energy forecast for the upcoming winter months.
In the meantime, though, commuters have welcomed the brief refrain from raising prices – despite an argument that the benefit is being offset by the rapidly rising cost of other essentials, such as housing and groceries.
Additionally, prices are still about 50 cents more than they were a year ago, after going into overdrive during Joe Biden’s presidency. Prior to that, under then-President Trump, prices had reached a historic low of $1.77 – 200 percent less than the current national average.
America’s gas prices rose for the first time to $3.69 in nearly 100 days Wednesday, putting an end to a historic streak of falling prices driven by stronger supply and weaker demand for fuel.
The 99-day decline – spurred by ongoing supply chain woes and the war between oil-rich Russia and Ukraine – saw prices rise to as high as $10 in some states, and a record national average of $5.02 in June
‘All streaks have to end at some point,’ AAA spokesperson Andrew Gross said in a blog post of Wednesday’s slight hike.
The rep went on to reiterate that the national average for a gallon of gas has fallen $1.34 since its peak in mid-June, before citing several factors that could account for the increase.
‘There are big factors tugging on global oil prices – war, COVID, economic recession, and hurricane season,’ Gross aid.
‘All this uncertainty could push oil prices higher, likely resulting in slightly higher pump prices.’
With that said, the plunge in prices can be traced back to a series of factors, including a more robust oil supply due to a recent release of millions of barrels of emergency oil by the White House, as well as weaker demand likely due to high prices deterring drivers from hitting the road.
The Biden administration has since touted the decline as a personal victory, after the president saw is approval rating drop to a record low of 36 percent amid Americans’ widespread frustration over the prolonged pain at the pump.
Since then, however, gasoline prices have come off dramatically – and Biden’s approval rating has subsequently seen a significant surge, to 42 percent.
A price board is seen at a gas station in New York on September 13. The state’s average, along with several others, has since fallen to below $4
Moreover, many contend that a further factor driving gas prices lower are growing concerns of a global recession – which could lead to a decreased demand for gas, if Americans cut back on spending and start losing their jobs.
Also likely contributing to the nearly 100-day decrease is the strong US dollar, due to the fact that crude oil – the main ingredient in automobile gasoline – is priced in dollars, meaning each dollar can buy more oil than it would if the value was stagnant.
The dollar index, which compares the value of the US currency to its major foreign counterparts, is up a whopping 15 percent this year – despite inflation reaching a 40-year high over the summer.
What’s more, the strengthening dollar also means that oil prices are rising faster for countries that don’t use the American greenback, lessening global demand.
Meanwhile, Russia’s oil flows have held up better than expected despite sanctions and the war in Ukraine, further contributing to the decrease.
However, as tensions mount between the countries following Russian President Vladimir Putin’s warmongering speech in which he announced military mobilization of the country and threatened to utilize nuclear weapons, experts warn that the Russia-Ukraine war could result in a European energy crisis.
Such a crisis on the other side the Atlantic could hamper the already ensnared global market, which is still struggling to keep up with demand.
Russia’s invasion of Ukraine, and the subsequent sanctions leveled on the Putin-led country, helped spark a steep rise in oil and gas prices in the US and other Western nations, with the average price the day of the invasion standing at $3.54 a gallon – just a few cents lower than where it stands today.
As tensions mount between Ukraine and Russian following Russian President Vladimir Putin’s speech war-mongering Wednesday, experts warn the war could result in a further energy woes
Russia’s announcement Wednesday that it would increase its mobilization of troops in the neighboring nation saw the price of crude oil futures life 2 percent in global markets.
Soaring gas prices and high inflation for other basic goods have emerged as key issues for President Joe Biden and congressional Democrats ahead of the mid-term elections.
Gas prices have now more than doubled since Biden took office in January 2020, when the national average stood at $2.39.
A recent ABC News/Ipsos poll found that 83 percent of Americans say that the economy is either an extremely or very important issue in determining how they will vote in November.
Soaring gas prices and high inflation for other basic goods have emerged as key issues for President Joe Biden and congressional Democrats ahead of the mid-terms
A new ABC News/Ipsos poll shows that 83 percent of Americans say that the economy is either an extremely or very important issue in determining how they will vote in the 2022 midterms – and a majority disapprove of Biden’s handling of economic recovery, inflation and gas prices
When it comes to economic issues, Biden scores the worst on gas prices, with 72 percent of voters disapproving of his handling of the issue.
Only 27 percent of Americans approve of how Biden is handling gas prices.
The administration continues to call rising gas prices ‘Putin’s price hike,’ and places the blame on the conflict in Eastern Europe.
Prices, meanwhile, soared above $5 per gallon over the summer adding to financial pressure on families and a creating a headache for the Biden administration – a headache that looks to be far from over.
There’s an argument to be made that the benefit consumers have incurred from lower prices at the pump is being offset by the rising costs of other goods and services such as food and housing.
The latest US inflation data showed rents jumping 0.7 percent in August, for the biggest monthly increase in more than 30 years. Mortgage rates have soared by a similar 6 percent.
Amid these rising costs of living, Americans have in large part cut back on extravagances such as movies, shows and other forms of entertainment to make ends meet, while others have stopped eating at restaurants or ordering takeout.
A SellCell survey of 3,000 US adults revealed this month that nearly a fifth of respondents were looking for a second job and more than a tenth are selling old televisions, computers and other technology gear to raise cash.
The study shows that while average gas prices have dipped to $3.67 per gallon, the pain is still being felt by shoppers at grocery store checkouts.
U.S. consumer prices unexpectedly rose in August, with an 8.3 percent increase against the previous year, and underlying inflation accelerated amid rising costs for rents, healthcare and food.
According to the Labor Department’s Consumer Price Index, the overall cost of food rose 11.4 percent, with the food-at-home category, groceries, up 13.5 percent – the steepest rises since the late 1970s.
The average interest rate on the most popular US home loan, meanwhile, climbed to its highest level since October 2008, according to data released by the Mortgage Bankers Association (MBA) on Wednesday.
The average contract rate on a 30-year fixed-rate mortgage rose by 24 basis points to 6.25 percent for the week ended September 16, a level not seen since towards the end of the financial crisis and the Great Recession.
The Federal Reserve was set to raise interest rates by three-quarters of a percentage point for a third straight time later on Wednesday, threatening to raise mortgage rates again and further pressure borrowers.
The market will also be watching closely when the Federal Reserve announces the size of its rate hike Wednesday afternoon, with many hoping it will cause oil prices to fall once again.
Meanwhile, many argue that increases in costs of other good and services are occurring because of strong consumer demand spurred by falling gasoline.
On that same token, lower gas prices could potentially be seen as too much of a good thing, raising the costs of other items as it slows spending and subsequent stimulation to the economy.
Adversely, if falling gas costs lead to more consumption and more hiring, it could lead to a more aggressive effort by the Fed to compensate with further rate hikes.
The national bank will come to a decision regarding the prospect rate raise Wednesday afternoon.