Gas prices could rise $0.10 per gallon this summer: EIA

Americans may feel a strain on their wallets at the gas pump during the upcoming summer season. According to a report from the US Energy Information Administration (EIA), gas prices are projected to rise by approximately 10 cents per gallon over the summer months, potentially reaching an average of $3.70 per gallon nationwide.

Yahoo Finance's Ines Ferré breaks down the factors contributing to this anticipated surge in gas prices.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video transcript

Turning now to gas prices which could go up by more than 10 cents as we head into the summer, the busy travel season there.

That is according to the US Energy Information Administration here, break here to break down the driving forces behind possible rising cost is our very own.

And as for as, yeah, Madison and the EI A saying that this summer you could see prices at the pump up by about 10 cents per gallon.

And that is if refineries reduce their output, if their capacity for output goes down.

Also, if their costs for these refineries go up.

Remember that a lot of these refineries are older, so the cost to maintain them is higher.

Now we are seeing that at the pump, the average national price is right now at $3.60 prices for gasoline pretty much peaked around April.

And that was when you saw crude oil go higher.

That was because you saw some refinery interruptions $3.60 a gallon a week ago.

It was at 364 and a month ago it was at 364.

So you can see that they have come down off of their peak.

Of course, during the summer driving season, you are seeing prices that are higher also because of the more expensive blend that is used during the summer.

So the base case scenario now for uh the EI A is for prices to be at around $3.70 per gallon.

As far as oil is concerned, oil has come off of its April peak.

It's down about 8% from that April April peak and we can show you the oil charts here.

Brent crude is at $83 per barrel wt I at around $80 per barrel.

And a lot of analysts are expecting OPEC Plus to extend its output cuts beyond June.

They don't expect brand prices to go up above $90 a barrel.

OPEC wouldn't want that.

There would be a recession worldwide if that happens and you would see demand coming down.

So the range has been pretty tight as far as what analysts are expecting for oil prices for the second half of this year.

Guys.