“It’s maddening what they do this time of year, but what are you going to do. If you don’t pay it, you’re not getting it,” Malik Fry said as he filled up his truck.
U.S. oil prices crashed went above the $70-a-barrel mark last week for the first time since late 2014, foreshadowing costlier gasoline and consumer goods.
The hike comes after President Donald Trump announced the U.S. will withdraw from the Iran Nuclear Deal and reinforce economic sanctions. And Venezuela, which holds most of the world’s oil reserves, is in turmoil with a dwindling supply.
It’s too early to gauge how fallout from the canceled Iran deal will affect people at the pump, said GasBuddy analyst Patrick DeHann. The impact of the pulled deal will mostly depend on whether America’s allies follow Trump’s lead and again impose sanctions on Iran, which could intern decrease Iran’s crude oil exports, DeHaan said.
“It’s a little bit of a tough one this summer because of all the geopolitical noise,” DeHaan said. “My crystal ball gets a little foggy with all this noise.”
Prices at the pumps in Ohio are still slightly below the national average of $2.84 a gallon. In California, prices are inching toward $4 a gallon.
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The summer travel season kicks off on Memorial Day weekend and according to Trip Advisor, 74 percent of Americans plan to drive for their travel plans, meaning even a road trip to Lake Erie will be more costly this year.
According to AAA, more than 41.5 million Americans will travel this Memorial Day weekend, nearly 2 million, or 5 percent more than last year and the most in more than a dozen years.
“The highest gas prices since 2014 won’t keep travelers home this Memorial Day weekend,” said Bill Sutherland, senior vice president, AAA Travel and Publishing. “A strong economy and growing consumer confidence are giving Americans all the motivation they need to kick off what we expect to be a busy summer travel season.”
The chance of gas hitting $3 in Ohio soon is probably a little higher than the national average at this point, DeHaan said.
Dayton in particular could see “a pretty hefty hike” as gas prices in the Gem City will likely linger between $2.65 and $3.05 early in the summer, DeHaan said. After the first weeks of summer pass, it’s likely that prices could drift back downward, he said.
“We’re on the cusp of hitting $3 a gallon but I don’t think that will be the norm this summer,” DeHaan said. “For the next couple of weeks we have a pretty good chance to hit that but gas stations will resist that, they’ll take it on the chin. They don’t want to be the first over three.”
Eventually fuel prices show up in the costs of all sorts of consumer goods that are hauled by plane, train or truck. Online shoppers could see fewer offers of free shipping, said Diane Swonk, chief economist for accounting firm Grant Thornton LLP.
Swonk believes that oil prices are not yet high enough to derail economic growth.
“We are still adding jobs, and that is helping us to absorb it,” she said. “Wages aren’t accelerating as rapidly as we would like, but we are hearing a lot of anecdotal reports of wages picking up and that should help.”
Others are less sanguine. Longtime energy economist Philip Verleger believes the run-up is enough to trim growth “because consumers are going to have to cut expenditures on stuff other than gasoline.” And he believes that oil prices are heading much higher.
The Associated Press contributed to this story.
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By the numbers
$3: Amount gas could spike to before July 4 in Ohio.
$2.89: Highest price per gallon in region on Monday.
$2.67: Lowest price per gallon in region on Monday.
$2.84: Average national gas price.