Gas prices are heading back toward $3 a gallon

OilDow Jones Newswires

(REUTERS/Shannon Stapleton)

Remember $3 gasoline? Prices could get there again soon, according to Oil Price Information Service.

Continue Reading Below

This summer's driving season is likely to be the most expensive since 2014, according to OPIS analysts, with drivers expected to pay an average of $2.79 a gallon for gas. That's nearly 11% higher than the current national average price of $2.518 a gallon, according to AAA. And prices in some cities are likely to top $3 a gallon.

That means the typical driver is likely to pay $167.40 for fuel in April, up from $143.40 a year ago.

Still, that's peanuts compared to 2014 when gasoline prices averaged $3.64 a gallon in April, and the average driver shelled out $218 in monthly fuel costs, the OPIS analysts note.

Prices almost always climb in March as drivers shake off the winter doldrums and refiners do maintenance work.

But this year's price jump could be bigger than it has been in recent years when oil prices were relatively depressed, OPIS says.

Rising oil prices are the clearest culprit: Brent crude prices have averaged $67.55 a barrel this year so far -- the highest since 2014 when Brent averaged $107.88 a barrel through Feb. 26.

Demand is also rising both in the U.S. and abroad. U.S. refineries have become a fuel lifeline to much of the world, particularly in Mexico and South America which have been hobbled by operational issues.

And U.S. refiners that put off maintenance projects during Hurricane Harvey will likely have to get to that work now, with heavier maintenance planned for this year than normal, OPIS says.

Speculators may also play a role. Hedge funds and other money managers have piled into bullish bets on gasoline futures. Their net long position hit a record number of contracts a few weeks ago, and bullish bets still outnumber bearish ones almost 7 to 1.