(CNN) — Prices at the pump continue to shatter records ahead of Memorial Day weekend.
The national average for regular gas hit a fresh record of $4.48 a gallon Monday, according to AAA. That marks an increase of 15 cents in the past week and 40 cents in a month.
Gas prices are now up by 27% from the day before Russia invaded Ukraine.
“Everything is pointing toward even higher prices. We are well on our way toward $5,” Andy Lipow, president of Lipow Oil Associates, told CNN Monday.
Citing a surge in gasoline futures, Lipow is raising his gasoline forecast from $4.50 to $4.75 a gallon, suggesting drivers on Memorial Day weekend may be greeted by record-high prices.
Lipow said $5 is “possible,” though he conceded the outlook could change considerably if there is a surprise development in the war in Ukraine or with Covid.
According to AAA, the average is already above $5 a gallon in four states: California, Washington, Nevada and Hawaii. Oregon is just a penny away.
Gas spike is making inflation worse
It’s important to note that gas prices are not at record highs after adjusting for inflation. The inflation-adjusted record was set in June 2008 when they averaged $5.38 a gallon, according to the US Energy Information Administration.
Still, the latest jump in gas prices threatens to worsen inflation headaches facing families and the US economy broadly.
The problem is that supply still can’t keep up with demand, especially for gasoline, diesel and other petroleum products. Gasoline futures jumped to fresh record highs on Monday.
The good news, according to Lipow, is that gasoline production should ramp up in the coming weeks as US refineries end maintenance season.
The bad news is that oil prices remain high. US oil prices jumped 4% on Friday to settle at $110.49 a barrel, the highest level since March 25. Oil prices were little changed Monday morning.
Demand for energy continues to ramp up as the world recovers from Covid-19. Despite China’s Covid lockdowns, oil demand in March stood at 101% of 2019 levels, according to the International Energy Forum, citing newly released data from the Joint Organizations Data Initiative (JODI).
However, supply continues to lag, with production standing at just 97% of 2019 levels.
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