JP Morgan Warns Gas Prices About To Get Much, Much Worse

As Americans struggle to stay afloat economically, President Joe Biden continues to blame soaring gas prices on Vladimir Putin, dubbing the nation’s fuel and other economic woes, “Putin’s price hike.”

Some experts think our struggles are only beginning, unfortunately.

According to JP Morgan research, those same skyrocketing gas prices could reach $6 a gallon by the end of summer. According to AAA, on Wednesday, the national average for a gallon of gas broke yet another record, topping out at $4.56 per gallon – meaning the worst is yet to come.

Biden on March 31: Gas prices will “continue to come down … it will come down and it could come down fairly significantly”

Gas prices just reached a new record high for the 9th day in a row. pic.twitter.com/8quZblf5pQ

— RNC Research (@RNCResearch) May 18, 2022

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Could Get Much Worse

The new national average price of a gallon of gas is up 50 cents from just one month ago, and $1.52 from the same time one year ago.

The average price was just $2.12 in the last month of the Trump administration. So much for “Putin’s price hike.”

JP Morgan predicts that the price could surge again as much as 37% by August. That could put the national average price for a gallon of gas at $6.20.

Natasha Kaneva is the head of JP Morgan’s global commodities strategy team. She said,

“Typically, refiners produce more gasoline ahead of the summer road-trip season, building up inventories. However, since mid-April, gasoline inventories have fallen counter seasonally and today sit at the lowest seasonal levels since 2019, gasoline balances on the East Coast have been even tighter, drawing to their lowest levels since 2011.” 

Los Angeles and San Francisco have already reached the six dollar mark for gas, and AAA also reports that it is the first time that the national gas price average has climbed to $4 a gallon in all 50 states.

Let’s review. Upon taking office, Biden canceled Keystone, halted oil & gas leases, imposed new regulations on energy production, and cut off support for fossil fuels. But @SecGranholm says: no effect on gas prices

— Josh Hawley (@HawleyMO) May 19, 2022

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The Real Reason Behind High Gas Prices?

On Wednesday, during an appearance on the Fox News Channel, Sen. Marco Rubio (R-FL) put forth the notion that a faction of the left likes high gas prices, believing it will force Americans to buy electric cars and use mass transit. He stated,

“I think there are people in their party that actually like it. They’re not going to say it. They don’t want to get crushed in the next elections, although I believe they will be. But they like the fact that there’s inflation and high prices. They believe the more expensive oil and gas gets, the more people are going to buy electric cars. Well, not everyone can afford an electric car right now. We don’t have enough electric cars, and the batteries for those electric cars or made in China.”

But there are some on the left, even in Congress, who are not afraid to say what their ultimate goal is out loud, according to Rubio:

“These guys, they want this. I’ve had people tell me to my face, ‘well, that’s why we need more mass transit. Everyone should be riding a bus and getting rid of their cars.’ I think there are elements on the left, a lot of elements on the far-left that will never admit it. But they like the fact that oil and natural gas is expensive.”

The Need For Oil Apparent Even To Those It Would Hurt

As SpaceX and Tesla CEO Elon Musk becomes more front and center in the public eye during his attempt to buy social media giant Twitter, so does what he says. As someone who founded and heads up a company that manufactures electric cars, even Musk was honest enough to say that, following the Russian invasion of Ukraine, production in the U.S. needed to be ramped up. 

Musk also pointed out that, while increased oil production would “negatively affect Tesla,” green energy was not yet able to fill the gap:

Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports.

— Elon Musk (@elonmusk) March 5, 2022

At the end of April, JoeBiden announced that he would allow the sale of E15, an ethanol blend that contains a higher higher percentage of corn and is said to be a cheaper substitute.

At the end of March, Biden also announced he would be releasing 1 million barrels of oil a day from the strategic oil reserves in order to combat high gas prices. 

A Wells Fargo Securities senior energy analyst Roger Read called it, “a little bit of a Band-Aid.”