A gasoline-related exchange traded fund continues to rally with gas prices hitting record highs as millions of Americans remain unperturbed and begin to travel for the summer holiday season.
The United States Gasoline Fund (NYSEArca: UGA) rose 3.0% on Wednesday.
According to AAA, the national average price for a gallon of regular unleaded gas rose to $4.62 as of Monday, or $1.58 higher year-over-year and about 12% above the pre-2022 high of $4.11 back in 2008, the Wall Street Journal reported. Prices have jumped about 11% over the past month, and gas prices rose above $4 in all 50 states for the first time.
Despite the high pump prices, analysts believed that the gasoline prices so far haven’t affected many travelers’ summer plans, partially due to the demand to travel after the COVID-19 related lockdowns.
“Folks have decided, ‘Look, I’ve been good. I’ve been hunkering down for two years. I’m gonna go, and I’m gonna go big,’” AAA spokesman Andrew Gross told the Wall Street Journal, projecting in May about 34.9 million Americans could travel by automobile for the Memorial Day weekend, or up 4.5% from 2021.
“The pandemic has instilled in most people a greater appreciation for travel, and that’s reflected in the plans Americans are making to get out and about this summer,” Chip Rogers, AHLA’s president and CEO, told CNBC. “But just as COVID’s negative impact on travel is starting to wane, a new set of challenges is emerging in the form of historic inflation and record-high gas prices.”
Despite crude oil prices pulling back from their record highs in March, gasoline prices remain elevated due to a range of factors. While crude oil prices have retreated, they remain around $120 per barrel, or 70% higher year-over-year. Oil inventories were also tight in response to heightened demand caused by economic reopening and Russia’s invasion of Ukraine.
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