Tim Rogus, a retired publisher in suburban Chicago, has noticed fuel prices at the petrol station creeping up towards $3 a gallon, as oil has rebounded to four-year highs this month, but he is philosophical about it. “Our prices were nearly $4 at one point,” he says. “Life has to go on somehow.” His attitude sums up the expected impact on US consumers of rising oil prices: not a disaster, but another burden to bear, with rural areas and middle-income households hit the hardest.
Americans are expected to spend an average of $400 per household more on fuel this year than in 2016, as the rebound in crude prices is reflected in the cost of petrol at the pump. By contrast, middle-income US households will on average gain $930 each from the tax cut bill passed at the end of last year, according to the Urban-Brookings Tax Policy Center. The average price of petrol in the US was about $2.75 a gallon last week, according to the government’s Energy Information Administration, up $1 from its low point of about $1.75 in February 2016. Share this graphic
The “driving season”, the peak of petrol consumption in the US, is April to September, and the EIA expects prices this summer to be at their highest for four years, up 10 percent from 2017. Oil has been pushed higher by the success of Opec’s strategy of restricting output, and international risks including Saudi Arabia’s war with Houthi rebels in Yemen, and tension between the US and Russia over Syria. A decade ago, before the shale oil boom, prices at these levels would have loomed large for US policymakers. The surge in US production, which has cut net imports sharply, has calmed those fears.