Gas Prices Could Rise 20 Cents a Gallon by August

AAA said on Tuesday that gas prices were expected to increase another 10 to 20 cents through the end of August.

The average price of a gallon of regular in the United States has risen to $3.13, according to AAA, up from $3.05 a month ago. A year ago, as the pandemic kept people home, a gallon of gas cost just $2.18 on average.

The rise comes amid a breakdown in talks among OPEC and its allies over whether to expand oil production as travel resumes and global demand recovers. The cartel has been unable to reach a deal despite multiple meetings since Thursday.

“Robust gasoline demand and more expensive crude oil prices are pushing gas prices higher,” Jeanette McGee, an AAA representative, said in a statement. “We had hoped that global crude production increases would bring some relief at the pump this month, but weekend OPEC negotiations fell through with no agreement reached. As a result, crude prices are set to surge.”

Scott Hanson of Western Springs, Ill., remembers when $40 was enough to fill up his gas tank last year, when he lost his job as an office manager due to the pandemic. Now, Mr. Hanson is paying over $60 to fill his Dodge Charger, making it harder to take his mother to her doctor appointments. Gas in Illinois is averaging $3.36 a gallon, according to AAA.

“It’s too much for too many people that lost their jobs or have low-paying jobs,” Mr. Hanson said on Tuesday. “Everything bad that could happen is happening all at once.”

Washington has seen one of the biggest spikes, with the price of regular gasoline rising 20 cents in the past month to $3.81, according to AAA. In California, which generally has some of the highest gas prices in the country, a gallon goes for $4.31.

Crude oil fell off its recent highs on Tuesday, with West Texas Intermediate, the U.S. benchmark, down more than 2.5 percent to about $73.15. But even those prices have not been seen since 2018, and they are far above the prices from early in the pandemic, when the price of a barrel hovered around $40.

As travel ground to a halt early last year, Russia, which is part of the group of allied oil producers known as OPEC Plus, refused to cut production, sparking a price war with Saudi Arabia, the de facto leader of OPEC, that helped drive prices to rock-bottom. Oil-producing nations finally agreed to cuts and have been operating mostly in lock-step for months, raising output slowly to keep prices high.

But the conciliatory nature of the agreement seems to have stalled, with OPEC Plus failing for days to come to a decision on production, and oil prices have fluctuated as traders await a result.

Gas prices have also been volatile as the economy has reopened. With a jump in travel already adding upward pressure, a cyberattack in May on a gas pipeline that provides nearly half of the East Coast’s fuel supplies led to panic buying, shortages in some areas and a temporary spike in prices.

Americans are also keeping a close eye on Tropical Storm Elsa, which is headed for the Gulf of Mexico and parts of Florida. The storm is unlikely to cause disruptions to Gulf Coast crude and gasoline productions as winds recede, according to AAA.

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