Gas prices have surged in recent weeks and analysts predict they’ll keep rising, creating fresh openings for GOP attacks against President Obama that had waned when prices dropped sharply.
The nationwide average for regular gasoline is $3.60-per-gallon, a 24-cent rise over the past four weeks, according to AAA.
Prices are well below the peak of nearly $4 in early April, a run-up that fueled constant GOP criticism of White House energy policies and threw Obama on the defensive. The frequency of political clashes over gas prices have tapered off since prices tumbled.
Friday brought fresh evidence that pump prices are likely primed for more increases in coming weeks.
U.S. oil futures prices, buoyed in part by the Labor Department report of 163,000 jobs created in July, jumped by over $4-per-barrel to settle at $91.40 in New York trading. Prices for European Brent crude, which some U.S. refiners use, also rose sharply Friday.
A continued rise in oil prices, which had fallen below $78-per-barrel for U.S. crude in June, would fuel what analysts say is already going to be some pump price increases on tap.
“I am expecting that over the next couple of weeks, gasoline prices are going to continue to drift up another 10 cents a gallon,” said Andrew Lipow, president of Lipow Oil Associates. He predicts a peak in the range of $3.70 to $3.80.
Tom Kloza, the chief analyst at the Oil Price Information Service, sees prices in the $3.60-$3.75 range this month before easing back after Labor Day.
Several analysts predicted that prices will recede again in September as the driving season tails off and refiners are able to move away from more expensive summer blends, among other factors.
But that still leaves weeks for Republicans to try and lay rising pump prices at the feet of Obama and Democrats, even though experts say that federal policymakers have little effect either way on prices that are tethered to global oil markets.
Kirsten Kukowski, a spokeswoman for the Republican National Committee, said pump prices will be part of their political messaging, alongside other staples like jobs data. “We are going to be talking about every economic factor,” she said.
The National Republican Senatorial Committee, meanwhile, vows to hit vulnerable Senate Democrats – such as Claire McCaskillClaire McCaskillSunday shows preview: Trump sits down with Fox Democrats unnerved by Trump's reliance on generals Senate passes stopgap funding bill, averting shutdown MORE (Mo.) – and Obama over the prices.
“The NRSC fully intends to highlight the disastrous effects President Obama’s EPA has had on our nation’s energy prices including their rejection of the Keystone Pipeline,” said spokesman Lance Trover.
The recent increase in prices has been rapid – AAA calls it the biggest July gain since they started tracking it in 2000, said Avery Ash, AAA’s manager of regulatory affairs.
Ash and other experts say most of the recent run-up in gasoline prices stems from the rise in crude oil prices. Tensions with Iran and sanctions and other factors have made oil more expensive in recent weeks.
“We have seen some of that risk premium from these geopolitical tensions come back into the market,” said Ash, who also noted the weakness of the dollar is another factor in the oil price rise.
“Crude oil prices have been going up as we have seen the impact of sanctions against Iran,” Lipow said, and also noted upward pressure from the dispute between Sudan and South Sudan that has shut down production, and other reasons.
(Sudan and South Sudan announced an agreement on oil payments Saturday, but Reuters, citing oil industry sources, reported that restarting production in South Sudan could take months.)
The Obama administration announced increased sanctions against Iran on Tuesday, while both houses of Congress approved legislation on Wednesday that would significantly tighten sanctions against Iran's energy, shipping and insurance sectors.
Michael Lynch, president of Strategic Energy and Economic Research Inc., said the sanctions efforts and Mitt Romney’s aggressive talk on Iran’s nuclear program during his recent visit to Israel are influencing energy prices. “I think the Iranian situation has become tenser and that is making people more concerned,” he said.
Ash noted other reasons why pump prices have been climbing, noting that the rise in ethanol prices (an effect of the drought-driven surge in corn prices) has been a limited “backseat factor.”
Kloza, like other analysts, notes the increase in oil prices from the low of $77.69-per-barrel for U.S. crude futures in late June has added to the pump prices. But he said there are other forces at play.
“[R]efiners are having a wonderful summer. Margins for gasoline were quite high in July, and August has started with a “big inning” thanks to a cluster of refinery issues (outages, disruptions, a few small fires, etc.) in various parts of the country, but particularly in the Midwest,” he said in an email.