U.S. gas prices surged to an average of 3.87 U.S. dollars a gallon nationally on Thursday, the highest level in 10 months, data showed.
That’s 31 cents higher than a month ago, but still below the record high of 5.02 dollars in June 2022, according to the American Automobile Association (AAA).
California has been on the top of the 10 most expensive markets across the country, with an average of 5.18 dollars a gallon, followed by Washington, Hawaii, Oregon and Alaska.
The summertime gas price spike has been driven by lower gasoline stockpiles and a series of refinery outages caused by extreme heat.
Goldman Sachs estimated that record heat levels in Texas have likely led to a sharp 2 percent slump in U.S. refiners’ product yields over the past few weeks.
AAA said in a press release that the potential for hurricane development and forecasts of an expanding heat dome over Texas, Oklahoma and Kansas next week could push oil prices higher.
“The heat is returning, and we are also entering the heart of hurricane season,” Andrew Gross, AAA spokesperson, said.
“While fewer drivers are fueling up at the moment, these looming weather concerns are a roadblock to falling pump prices. Gas Prices may keep waffling until mid-September or longer,” he said.
Meanwhile, weekly U.S. gasoline storage has remained below the five-year average of inventories throughout this year, setting the stage for price spikes if refining capacity is disrupted.
Total U.S. gasoline stocks this month fell to 216.4 million barrels, the fifth decline in six weeks, official data showed.
During the week ending Aug. 11, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, dropped by 6 million barrels from the previous week to 439.7 million barrels, about one percent below the five-year average, according to the Energy Information Administration (EIA).
At the same period, total motor gasoline inventories were some 6.0 percent below the five-year average, and distillate fuel inventories were about 16 percent below the level.
Demand has fallen recently, but fluctuating oil prices have kept pump prices elevated, AAA said.
Although consumers tend to get a break from steeper fuel costs as peak vacation travel ebbs, analysts at Goldman Sachs expect that U.S. national retail gasoline prices will hit an average of 3.90 dollars a gallon this month.