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U.S. gasoline average price tops $5 per gallon in historic first

U.S. gasoline average price tops $5 per gallon in historic first

Reuters: The price of American gasoline was, on average more than $5 per gallon for the first time on Saturday, AAA data showed, extending an increase in fuel costs which increases inflation.

According to AAA data, the national average price for regular unleaded gas reached $5.004 on June 11, compared to $ 4.986 earlier.

The high gasoline prices are a headache for President Joe Biden and the Democrats of the Congress when they find it difficult to maintain their thin control of the Congress halfway upcoming elections in November.

Biden has shot many levers to reduce prices, including a record publication of barrels from American strategic reserves, renunciations of summer petrol production rules and based on the main OPEC countries To increase production.

However, fuel prices have increased worldwide due to a combination of demand for the rebound, sanctions against the producer of oil, Russia, after he invades Ukraine and pressure on refining capacity.

Destruction of demand. However, the journey on the road remained relatively strong, just a few percentage points below the pre-pale levels, even if the prices have increased.

However, economists expect the demand to be able to decrease if prices remain greater than $5 per barrel for a sustained period.

“The level of $5 is where we could see very heavy quantities of the destruction of petrol demand,” said Reid the Anson, principal economist at KPLER.

Adjustment of inflation, the average American gasoline is still around 8% below the summits of June 2008, around $ 5.41 per gallon, according to figures from the American energy department.

Consumption expenditure has so far been resilient, even with inflation, at its highest level in more than four decades, with household assessments, pandemic rescue programs and a tight labour market that has fueled salary gains, especially for low-income workers.

According to the U.S. Energy Information Administration, the petrol product provided, an indirect demand indicator, was 9.2 million barrels per day last week, largely following the five-year seasonal averages.

U.S. gasoline average price tops $5 per gallon in historic first

The high prices for drivers have come while large oil and gas companies after the bumper profits. Shell said a record quarter in May, and Chevron Corp and BP displayed their best figures in a decade.

Other majors, including Exxon Mobil and Totalengies, as well as American independent shale operators, have declared solid figures that stimulated action buybacks and dividend investments.

Many companies have said they would avoid excessive investments to stimulate production due to investor wishes to maintain the spending line, rather than responding at prices of $100 and more barrels that have persisted for months.

Refiners find it difficult to rebuild stocks that have decreased, in particular on the east coast of the United States, reflecting exports to Europe where buyers were used by Russian oil.

Refiners use approximately 94% of their capacity, but the overall refining capacity of the United States has dropped, with at least five oil transfer factories closed during the pandemic.

Analysts said that this has left the United States short of refining capacity for the first time in decades.

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U.S. gasoline average price tops $5 per gallon in historic first

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