Gas Prices May Hit $4 Per Gallon Sooner Than Expected, Analyst Warns

Rising pressure in the U.S. gasoline market has pushed analysts to revise upward their price forecasts, with one prominent energy strategist predicting that $4 per gallon could be reached within the next 12 months. This projection comes amid constrained refining output, particularly in the Gulf Coast region, where maintenance delays and aging infrastructure have limited gasoline production capacity despite strong demand from transportation sectors. The benchmark crude oil contract, CL=F, has climbed 7.3% over the past two weeks, reflecting growing concerns about supply reliability. Meanwhile, natural gas futures, NG=F, have risen 5.1% on the back of colder-than-expected winter weather in key consumption zones, further straining energy input costs for refiners. These developments have contributed to a 12% spike in the CBOE Volatility Index (^VIX) over the same period, signaling heightened investor anxiety around energy market stability. The current average national gasoline price stands at $3.48 per gallon, according to federal energy data, but regional variations are widening—some Midwest and Northeast markets already report prices above $3.70. Refinery utilization rates are now at 89.2%, below the 92% seasonal average, indicating that supply is struggling to keep pace with demand. The Energy Information Administration has noted that the U.S. is importing 1.8 million barrels per day of refined products, the highest level in over five years, as domestic production lags. Market participants are recalibrating inflation expectations, with 10-year Treasury yields rising 12 basis points in response to the energy outlook. The transportation sector, already under margin pressure, could see a significant uptick in operating costs, potentially leading to higher freight and passenger fares. Consumers may also face reduced discretionary spending as more of their income goes toward fuel.