While it’s likely that you haven’t been filling up your vehicle’s gas tank as often as you did during pre-pandemic times, there’s a decent chance the billboard outside your local gas station caught your eye the last time you passed it. Specifically, you may have been surprised to see the price that gas is going for these days, as it’s noticeably higher than it has been at other parts of the pandemic. According to AAA, the current average price for a gallon of gas clocks in at $2.40, and there’s some conversation that this price per gallon will rise to around $3 by summer.
What’s the reason behind this increase in gas prices? Hope.
While you may be grimacing at the price of gasoline now and the thought of paying $3 a gallon by this summer, the price increase is actually good news — according to economists. Keep in mind that during the early days of the pandemic last April, you could find gas for less than $1 per gallon in 13 states – a sign that demand was very low.
So, why you might ask, is gas on the upswing – especially since we’re arguably in the darkest days of the pandemic with so many businesses still closed and so many people still working from home? We’ve told you before that while the stock market has largely recovered from its major losses last March, it seems to ebb and flow based on COVID-19 vaccine news. And noting this, it shouldn’t surprise you to learn that crude oil futures are ticking up with positive vaccine news and increased distribution.
There’s the hope that the dark days of the pandemic are numbered and that activity will begin resuming to normal as the vaccine rollout progresses. By summer, there’s hope that demand for gasoline will be strong again as Americans head back to the office, hit the road for vacations and business travel, and attend sporting and other entertainment events.
In other words, if traders are market analysts thought that the global economy wasn’t going to soon improve and recover, crude oil prices likely would not be increasing. And this increase is only likely to continue its ascent in the months ahead.
There’s no question that these past 11 months or so have been hard on everyone, but if there have been even small slivers of positives to come out of things it’s that the economic environment has lent itself to much cheaper gas prices. The fact that these prices are rising again shouldn’t be tough for anyone to stomach. It’s simply a sign that there’s renewed hope and optimism that the pandemic’s end is within sight and that life as we know it is closer to getting back to the way we all want it to.