Rising gasoline prices hit the US hard

Forecast lowered

Economists are concerned that rising energy prices may worsen overall inflation. Coupled with the intensifying geopolitical crisis, this could slow the economic rebound in the US.

Goldman Sachs has lowered its forecast for annual US economic growth, citing higher oil prices. It said that there is a risk the US will enter a recession in the next 12 months.

Peter McCrory, an economist at JPMorgan Chase, told The Washington Post, "The rise in energy prices will weigh on US economic growth, but overall, we are still looking for above-trend growth for the year."

Patrick De Haan, head of petroleum analysis at GasBuddy, expects gasoline prices to continue falling. He said in a tweet that demand for the fuel across the US last week through Thursday was up by 1.4 percent and was at its highest point since mid-December.

Gasoline prices are directly linked to global supply and demand, which De Haan said have changed due to the COVID-19 pandemic and the Russia-Ukraine conflict.

When demand for gasoline and oil plunged at the start of the pandemic, oil producers cut production, which reduced supplies. But as the global economy recovers from the pandemic, production continues to lag.

Prices for gasoline in the US have risen steadily for nearly two years. As the economy recovers from the pandemic and people resume driving, demand for the fuel is rising.

Against the backdrop of steadily rising prices, the US imposed a ban on Russian oil and other energy imports this month. Although the US imports less than 10 percent of its oil and gas from Russia, domestic prices are still affected by the sanctions.

According to experts, this is because the surge in gas prices is due to the larger global oil market, and the US sanctions are making it difficult for Russian oil to flow to the world market.