Expensive crude means more pain at the pump. With West Texas Intermediate (WTI) bouncing between $90/bbl - $95/bbl, crude products, such as gasoline and diesel, will remain in an upward trajectory.
According to American Automobile Association (AAA), the average price of a gallon of regular-grade gasoline in California stands around $4.719 per gallon on Wednesday, surpassing the previous record on Nov. 27. That's higher than the national average, which stands around $3.52, an increase of more than 40% since the same time last year when it was $2.505 a gallon.
High pump prices are driven by a number of factors, from geopolitical risk premium over Russia-NATO tensions, to Biden admin energy policies, and globally tight supplies amid an emerging demand as COVID's effects fade.
A terrified Biden administration has already orchestrated a crude dump from strategic reserves, an initiative joined by allies worldwide, but such a ploy has failed. Rising pump prices have become a liability for Biden as polling data slump to a new low ahead of midterms. Democrats are in panic mode as they pitch a "federal gas tax holiday" to alleviate pump prices.
To deflect pain at the pump, White House press secretary Jen Psaki told Americans this week that if Russia invades Ukraine, it would have "an impact on energy prices, which could have an impact on prices at the gas pump."
Californians are paying the highest prices for several reasons, taxation and state regulators only allow cleaner-burning grades of fuel that only a handful of refiners in the country can process.
Doug Shupe of AAA California told Bloomberg that even with gas prices at record high levels in the state, it's not going to stop consumers from filling up and driving. Though we should add, high prices will crimp the pocketbooks of millions of Americans as their wages are eaten away by inflationary forces -- this will have a significant impact on polling numbers for Democrats.
Readers may recall in early January, we cited Patrick De Haan, GasBuddy head of petroleum analysis, who said Americans should prepare for an average price of $4 by spring. With average US prices already around $3.488 as supplies dwindle amid geopolitical tensions, prices will remain in an upward trend. There's also the start of the "multi-month transition to summer gasoline, further adding to the rise at the pump," de Haan added.
The Biden administration already botched the strategic reserve release. Their attempts to quell Ukraine's conflict with Russia have yet to provide any meaningful impact on energy markets. Democrat's attempt for a tax holiday at the pump is another gimmick that won't work. So in the meantime, Californians, enjoy paying the highest gasoline prices ever.