The average price of a gallon of self-serve regular gasoline in San Diego County rose Tuesday for the 20th time in 22 days, increasing 2.8 cents to $6.067, its highest amount since Oct. 16.
The average price has risen 68.5 cents over the past 22 days, according to figures from the AAA and Oil Price Information Service.
How does this compare? It is 12.8 cents more than one week ago, 71.1 cents higher than one month ago and 28.3 cents above what it was one year ago.
The average price has dropped 36.8 cents since rising to a record $6.435 on Oct. 5, 2022. Could San Diego County be headed to beating last year's record?
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Rising oil prices meaning drivers are paying more for gasoline and truckers and farmers more for diesel.
This increase also complicates the global fight against inflation and feeds Russia's war chest. That poses problems for politicians as well as the people having to spend more to get to work, transport the world's goods or harvest fields.
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Here are things to know about the recent increase — and where prices might be going:
Why have oil prices risen?
"It's been a mostly quiet week for the national average price of gasoline, with most states seeing gas prices cool off," said Patrick De Haan, head of petroleum analysis at GasBuddy.
"But new and continued refinery issues in some regions have had an oversized effect on gas prices in some states, especially in Southern California, Arizona, and Nevada. While most states are likely to continue seeing gasoline prices fall in the week ahead, any new refinery issues as others begin maintenance could be problematic."
Above all, Saudi Arabia's decision to cut back how much oil it sends to global markets has pushed prices higher.
The world's second-largest oil supplier has slashed production by 1 million barrels a day since July and decided this month to extend the cut through the end of the year.
Russia, Saudi Arabia's ally in the OPEC+ oil producers' coalition, also extended its own cut of 300,000 barrels a month through 2023.
Simply, tighter supply means higher prices.
Simply, tighter supply means higher prices.
International benchmark Brent oil traded at just under $94 per barrel Monday, up from $90 before the extension on Sept. 5 and from $74 before the Saudi cut was first announced. U.S. oil traded at around $90.50, up from $68 before the Saudi cut.
How high could oil prices go?
Some analysts think oil could hit $100 a barrel based on robust demand and limited supply. But that's far from the only view.
Oil prices can be volatile, and while they might briefly top $100 in the coming months, they're unlikely to stay there, said Jorge Leon, senior vice president for oil markets at Rystad Energy. He foresees prices in the low $90s on average in the last three months of the year.
That's still high historically, he said, supported by “resilient” demand for fuel to drive and fly.
The Saudi cuts were a unilateral move outside the framework of the OPEC+ alliance, meaning the kingdom can make changes as needed to quickly respond to shifting market conditions.
Leon said the Saudis will review the cuts each month — and could add barrels back if prices spike to levels that could seriously worsen inflation in countries buying oil. Excessive price increases could mean central banks worldwide hike interest rates further or keep them higher for longer.
“I don't think it will be clever for the Saudis to push that hard,” Leon said. “The last thing you want to do is fuel inflation again with much higher oil prices. That's going to kill economic growth, and lower growth is going to mean lower oil demand at the end of the day.”
What other factors affect prices?
A big question is demand for fuel, which is picking up along with rebounding travel following the depths of the COVID-19 pandemic. A robust U.S. economy increases demand for oil — and the price — while weak growth in China and Europe has the opposite effect.
“We see the upside potential for the oil price as being virtually used up and if anything envisage setback potential in view of the weak economy,” said Thu Lan Nguyen, Commerzbank head of commodities research who foresees oil at $85 per barrel by year's end. “The oil price is only likely to climb more lastingly once the economic outlook begins to brighten, which should be the case next year.”
Another factor is financial speculation, and it appears investors are piling into the oil market with bets that prices will rise.
“Much of the price surge beyond $85 per barrel is due to a flood of speculative money, while fundamentally there is still plenty of oil in the world to meet demand for now,” said Gary Peach, oil markets analyst at Energy Intelligence.
Plus, more Iranian oil may come on the market as the U.S. “turns a blind eye” on enforcing sanctions to keep prices from rising further, Leon said. That could add 200,000 to 300,000 barrels a day.
What's the impact on consumers?
Costlier oil feeds through to higher prices for gasoline and diesel, especially in the U.S., where roughly half the pump price reflects the cost of crude — the rest is marketing, taxes and other costs.
Crude is a smaller share of gasoline and diesel prices in Europe because fuel taxes are much higher there.
Average U.S. pump prices are still well below the record $5 per gallon seen in summer 2022. But at $3.85 per gallon, they're still up 15 cents from a year ago. Oil costs are keeping gas prices high even as driving demand drops with the end of summer vacations and plentiful gasoline stocks, according to auto club AAA.
Diesel prices have risen as well, along with higher oil costs and refineries facing shortages of the specific kinds of crude best for making diesel. Refineries also are choosing to produce jet fuel instead, chasing profits as air travel rebounds. A gallon of diesel cost $4.58 last week, up from $4.34 a month ago.
That hurts farmers, who use a lot of diesel, and adds to the price of consumer goods transported by truck, which is pretty much everything.
Diesel supplies got even tighter Friday after Russia said it would halt the export of refined oil products to hold down fuel prices at home.
