US gas prices climb above $4 a gallon

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US gas prices climb above $4 a gallon

Gas prices in the United States are climbing to their highest level since 2008, as Russia’s invasion of Ukraine disrupted the global energy market.

According to AAA, the average price of a gallon of gas on Sunday peaked at $4.009, up 57 percent from a month earlier. The all-time high was in July 2008, when the average price was $4.114 per gallon. (When factoring inflation, this would equate to $5.25 a gallon today.)

Russia’s increasingly violent war against Ukraine, forcing more than one million residents to emigrate, has led to intense volatility in energy markets, partly because Russia is home to 10 percent of the world’s oil and the European Union. Provides more than a third of all natural gas. ,

Some refineries and traders have stopped buying crude from the country, even offering shipments at huge discounts. Refiners, shippers, insurers and banks are holding back as they fear a backlash from sanctions by dealing with Russia. Ukraine’s leaders are calling on countries to stop buying Russian oil, and US politicians have begun to support that action.

Brent crude, the international benchmark, rose 7 per cent to $118 a barrel on Friday. At the beginning of December, it was priced at around $65 a barrel.

Gas prices were already climbing during the pandemic, partly as a result of fluctuations in supply and demand. Sharp prices have prompted people to reshuffle household budgets, sometimes by excluding leisure activities and in other cases cutting essential expenses. Higher gas prices are helping to cushion inflation, which hit a 40-year high in January.

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Economists expect the Consumer Price Index, a closely-watched measure of inflation that is coming out on Thursday, to show that consumer prices rose 7.9 percent during February and 0.8 percent from the previous month. It will be above 7.5 percent in the year through January, indicating that inflation has not yet peaked.

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