As a three-day holiday weekend and corresponding increased travel approaches, drivers could be in store for a pricey Labor Day at the gas pumps.
“With oil prices jumping back to their highest level since July in the last two days, we may see gas prices inching up ahead of the long weekend,” said Patrick De Haan, lead analyst for the fuel cost-tracking website GasBuddy.com. “That is certainly now within the realm of potential.”
According to GasBuddy, the national average for a gallon of unleaded gas was at $4.01 to start the week. By midday Wednesday, it was up to $4.10 and on track to top the highest Labor Day price to date.
“We previously saw the all-time high in 2012, when the national average was $3.83 a gallon,” said De Haan. “So it indeed is likely to be the most expensive Labor Day weekend on record.”
The website showed the five-county Peoria market’s average at $4.19, with Peoria County itself at $4.27. The average in McLean County was just under $4.18, and the statewide figure for Illinois was at $4.31.
“A lot of this is being driven by geopolitical tensions between the U.S. and Iran, and between Russia and Ukraine — with Ukraine continuing to attack Russian oil refineries,” said De Haan, adding the diminished output from the Russian refineries also likely to push the price of diesel to record highs.
De Haan said he didn’t expect any immediate reductions stemming from the Trump administration's oil agreement with Venezuela announced over the weekend.
“It's going to take many years for that to be realized,” he said. “It certainly will be very impactful in the years ahead, but for now, it won't be impactful at all, simply because Venezuela lacks significant infrastructure to increase oil production in a meaningful way.”
He said drivers should expect volatility in the fuel markets to continue in the short-term as the war in Iran escalates, but any long-term expectations are difficult to forecast.
“That varies significantly depending on what is occurring between these geopolitical tensions,” he said. “It's impossible to know what is going to happen, so we could see elevated gas prices continue.”
