The market is neutral as investors await the Fed’s interest rate decision. Consumers and central bankers are struggling to cope with the unexpected rise in the cost of a gallon of gas.
The two-day increase in gasoline prices, the most significant increase in a year, is combined with an increase in the price of wheat and other agricultural commodities. A sustained rise in the cost of food and fuel would reverse the progress that has been made in bringing inflation under control, potentially compelling the Federal Reserve to keep hiking interest rates.
The American Automobile Association (AAA) reports that the national average price for a gallon of regular gasoline reached $3.69 on Wednesday. This represents the most significant one-day increase since June 2022 and is an increase of 5 cents from Tuesday’s price. And this comes just one day after another price hike of four cents, the most one-day price hike in the previous year.
Over the past two days, there has been an overall increase of 9 cents in the price of gasoline. Since June last year, drivers have not encountered anything remotely similar.
Patrick De Haan, head of petroleum analysis at GasBuddy, stated that the company is observing a significant spike in the market.
The combination of growing production cuts by OPEC and Russia, excessive heat that has stopped oil refineries, and confidence about the health of the global economy is what analysts believe to be the causes of the recent spike in oil prices.
The price of gasoline at the pump is still far lower than it was this time last summer. The national average was 64 cents higher a year ago, reaching its highest point, $1.33 higher, in June of 2022.