$4 Gas Prices Set to Soar Further Amid Ongoing Crisis

The recent US-Iran strikes have sent oil markets into crisis mode, causing Brent crude to surge past $98 a barrel. This has led to concerns that gas prices will continue to rise, potentially reaching as high as $120 per barrel and inflicting a $100 billion fuel hit on American households.

However, the problem is that drivers were already feeling the pinch at the pump before the strikes even occurred. The national average for regular gasoline has been stuck above $4 a gallon since August 31, with a peak of $4.50 in May. This represents a staggering $1.29-per-gallon jump over just eight months.

The Bureau of Labor Statistics' upcoming release of August Producer Price Index (PPI) data and Consumer Price Index (CPI) data will not capture the full impact of the oil spike, as the survey period closed before the strikes. The Federal Reserve's preferred gauge, the core Personal Consumption Expenditures Price Index, already hit its series high in July and does not account for energy prices.

The next few weeks will be crucial in determining whether gas prices continue to rise. If Brent crude holds above $95, it could signal a prolonged increase in fuel costs. The EIA's weekly retail gasoline report will also provide insight into how quickly refiners have passed the crude price increase through to consumers.