JPMorgan predicts $6 gasoline by the end of summer

JP Morgan has predicted that the entire country could be paying $6 a gallon for gas by the end of this summer.

“There is a real risk the price could reach $6+ a gallon by August,” said Natasha Kaneva, head of global oil and commodities research at JPMorgan Chase. “U.S. retail price could surge another 37% by August.”

With each additional $1 increase in gas prices, JPMorgan Chase estimates that Americans’ consumer habits will drop by 60 cents.

“The hit from higher gas prices is twofold for high-gas-consuming states. Not only do higher prices reduce real income by more than elsewhere, but such states also appear to be less able to offset higher prices by reducing real demand,” said Peter McCrory, U.S. economist at JP Morgan Research.

As of Thursday morning, the average price of a gallon of regular gas had reached $4.59, while a gallon of premium gas had reached $5.20, which is more than a $1.50 increase from last year at this time.

AAA said gas prices originally skyrocketed during the spring due to economic repercussions from Russia’s invasion of Ukraine. Now with more people driving during the summer months, oil companies are switching to a more expensive “summer blend” of gasoline that typically adds 7 cents to 10 cents per gallon depending on the market. The transition to summer oil has worsened the already inflated gas prices.

Sen. Ted Cruz (R-TX) hit out at Joe Biden, saying he cut off resources and implemented policies which have increased gas prices. “Record gas prices are the intended effects of [Biden’s] deliberate actions,” Cruz tweeted.

Some experts remain skeptical that the national average will actually exceed the $6 a gallon threshold. “It’s hard to get to $6,” Andy Lipow, president of Lipow Oil Associates, told CNN. “Before we get there, we would have significant demand destruction, not only here, but around the world.”