Gas Prices at This L.A. Station Surge Past $6 Per Gallon

by TK Sanders

As gasoline approaches record high prices across the country, residents of some major U.S. urban centers will soon face eye-popping numbers. At one Chevron station in Los Angeles, the price of regular unleaded easily topped $6 per gallon on Wednesday. Now the imagery, paired with global tensions in Russia and Ukraine, has the world wondering what the fate of the energy sector may hold.

Nationally, prices remain comfortably around $3.50 per gallon, but that number has grown steadily in the past 12 months. According to the AAA Gas Price Index, petroleum costs 90 cents more per gallon now than a year ago. The average cost of fuel in Los Angeles county currently hovers around $4.79 per gallon, but some service stations on particularly busy intersections or in nicer neighborhoods routinely jack up gas prices.

Is global conflict behind rising gas prices?

Some experts want to associate Russia’s interference with Ukraine as the primary driver for the increase in fuel prices. Russia is the world’s third-largest oil producer in the world — behind the U.S. and Saudi Arabia. So any disruption to their output could lead to significant price fluctuations. Others say, the impending military action is just the latest domino to fall. The value of the American dollar is decreasing due to, what some folks would consider, wildly irresponsible fiat management and spending. Couple that with government sanctions against oil drilling, environmental concerns as political fodder, and a supply chain that can’t right itself after mandated economic shutdowns, and you have a recipe for disaster regarding energy prices.

Oil prices have been creeping toward $100 a barrel amid the Ukraine crisis, hitting levels not seen since 2014. On Wednesday, U.S. West Texas Intermediate (WTI) crude futures rose $1.58, or 1.7 percent, to $93.47 a barrel, after reaching $96 on Tuesday. In response, the Biden administration proposed a suspension of the federal gasoline tax. The measure would ease pricing at the pump by about 18 cents per gallon. Such a measure would be a band-aid on a bullet wound, but it would help nonetheless; though no concrete plan for such a tax decrease has been passed by congress as of yet.

The stock market quickly approaches bear territory

The Russian-Ukrainian crisis is having the opposite effect on stocks than it is having on gas prices. The benchmark S&P 500 index falls further each day after slumping into correction territory, which equates to 10 percent below its previous high. That correction is flirting with turning into a bear market, or a decline of 20 percent or more, as the S&P 500 continues to sink.

Ukraine declared a state of emergency on Wednesday and told its citizens in Russia to flee. Moscow began evacuating its Kyiv embassy, which means all signs point to an all-out Russian military invasion.

‘The prospect of more conflict in Ukraine should safeguard the geopolitical risk premium,’ said Stephen Brennock at brokerage PVM Oil.