In what has become almost a daily pattern, gasoline prices have risen again, reaching $3.653 as the average price for a gallon of regular nationwide. The comparable price for premium reached $3.993. In several areas the price of regular has already crossed above $4, and that is likely to spread geographically.
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The average price of a gallon of regular was $3.521 a month ago, according to AAA Fuel Gauge. A year ago, the price was $3.522.
Several factors could push prices much higher. Every time the crisis in Ukraine flares, oil prices react with gains. Even if an interruption of energy from Russia hits, oil prices in the United States may not be affected. But the psychology of energy prices is based almost as much on speculation as fact. Crude has just reach $104.66, its highest level in a year. Additional upward pressure on the price has been exerted by news that the Chinese economy remains robust, even if its first-quarter gross domestic product numbers were a little disappointing at 7.4%.
The number of places in the United States where gasoline has moved above $4 has grown. First among these is California, where the average price for a gallon of regular statewide has reached $4.192. Several other states with large populations have average gas prices above $3.80. These include Connecticut, Illinois, Michigan and New York.
Economists do not have a yardstick for when high gas prices badly damage consumer spending. Obviously, the earliest signs are among lower- and middle-class Americans who are forced to commute or drive as part of their jobs. It is certain, however, that people of modest means begin to be squeezed financially as gas prices compete for the costs of their homes, food and energy to heat and cool their homes. At some point, the money they have for discretionary spending largely evaporates and the effect on the overall economy begins.
There are few reasons to believe gas prices will fall, and plenty that could gas tip over $4 across a large portion of the country.
READ ALSO: Why Gasoline Prices Have to Beware Shrinking Inventories
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