Gas prices, which pushed up inflation last month and are already close to record highs for this time of year, will continue to rise slightly over the next week.
However, industry analysts are hopeful relief is around the corner now that the heat impacting refineries appears to be over and the country prepares to switch to winter grade, which is cheaper to produce.
As of Wednesday, the national average of a gallon of regular gasoline sat at $3.84, according to data from AAA.
Lipow Oil Associates President Andy Lipow estimated prices could rise another three to five cents next week given that gasoline wholesale prices have been on the rise.
However, Lipow projected that gas prices will “level off and then slightly decline” as most of the country, aside from California, switches to winter grade gasoline Sept. 16.
Similarly, GasBuddy Head of Petroleum Patrick De Haan said he’s hopeful the country will “see an eventual decline.” De Haan projected the national average could fall between $3.35 and $3.50 per gallon by the end of the year.
Still, De Haan warned “there’s a lot of wild cards” in play that could shift prices.
For one, top OPEC producer Saudi Arabia and Russia recently decided to extend voluntary oil production cuts through the end of the year rather than month to month despite an optimistic OPEC+ demand forecast.
They have also “insinuated that if oil prices head lower, they may further raise the amount of the cuts or lengthen it,” De Haan told FOX Business.
The oil market went up on the news, which was announced last week, and has continued its rally ever since, according to Lipow. The price of oil, which accounts for more than half of what consumers pay at the pump, is already nearing $90 a barrel as of Wednesday.
Lipow believes “Saudi Arabia will continue to take actions to support the oil price” that would pump up prices for gasoline and diesel fuel.
All eyes are on regular gasoline prices, but Lipow stressed consumers should be watching the “relentless rise” in diesel prices.
That is “the biggest issue facing the consumer and the economy,” according to Lipow.
On June 1, the futures price of diesel was $2.315 per gallon, and the national retail price was $3.95, Lipow said. As of Wednesday, diesel futures were at $3.42, and the national average was $4.51 and headed higher.
“Diesel is like a hidden tax on the consumer,” he said. “It is used to deliver all the goods and services that they want. And as diesel prices increase, that cost is passed on to the consumer in the form of higher prices.”