High gasoline prices are already impacting demand, according to one energy expert.
“Above $4 per gallon, you do see the American public change their driving habits. And we do actively see demand destruction,” Regina Mayor, global head of energy at KPMG, told Yahoo Finance Live.
“I think that’s one of the things that helps the overall tightness of supply, is when we see demand start to dip back down,” she added.
U.S. West Texas intermediate (CL=F) and Brent (BZ=F) have seen massive price swings since the outbreak of the Russia-Ukraine war. Western nations imposed sanctions against Russia, a world crude exporter. The U.S. and U.K. also implemented a ban on Russian oil imports.
Gasoline’s national price average currently sits at $4.24 per gallon. Mayor expects prices to stay elevated for a while as we head into the summer driving season.
“We’ve got summer vacations. The travel industry is anticipating that airline activity will be higher because there’s a lot of pent-up demand from the pandemic. And this is when gas prices typically are higher anyway,” said Mayor.
“We’ve got crude oil prices that are through the roof. So unfortunately, I think in the near-term, consumers are going to still be seeing very high prices at the pump,” she said.
On Tuesday, WTI futures were down more than 1%, hovering above $110 per barrel. Brent crude was also slightly lower, is sitting above $114 per barrel.
Ines is a stock market reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre