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Gas prices could hit $3 nationwide Memorial Day weekend

At least 17 states were already at $3 per gallon as of Thursday, according to GasBuddy
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Handle fuel nozzle to refuel. Vehicle fueling facility.

Gas prices are marching toward the $3 mark nationwide as the summer driving season begins.

"I think we could see three bucks on Memorial Day," said Patrick DeHaan, senior petroleum analyst at gas-station finding app GasBuddy. "It's going to be really close."

Fuel prices were not expected to rise this high this year. But a constellation of factors have contributed to the spike, including rising oil prices, geopolitical developments and the strong economy.

At least 17 states were already at $3 per gallon as of Thursday, according to GasBuddy.

The good news? This might be the peak. Gas prices often hit their high around this time of year and start declining throughout the summer.

The bad news? At a national average of $2.96 a gallon as of Thursday. The price was 59 cents a gallon higher than a year earlier, according to AAA. That means the average 15-gallon tank fuel-up is nearly $9 extra.

Gas is the highest it has been since 2014, though it's still far below 2008's record $4.11.

Perhaps the biggest reason for the recent increase are oil prices that have hit a 41-month high after the Organization of the Petroleum Exporting Countries extended production cuts and the strong global economy stoked demand.

President Trump's move to reimpose sanctions on Iran and withdraw from a nuclear accord with the Middle East nation has contributed to the increase.

Seasonal factors are inescapable, too. This is the time of year when gasoline formulas are changed to minimize pollutants.

"Besides the pull of demand on prices in the summer, refiners have to replace cheaper blending components with more expensive ones in order to meet environmental regulations," Judith Dwarkin, chief economist at RS Energy Group, said in an email. "This factors into the gasoline price."

Despite the increases, consumer behavior isn't changing much right now. Experts say it would take a much bigger spike for drivers to curb their travel significantly or buy more fuel-efficient vehicles.

In fact, more than 41.5 million Americans are expected to hit the road for Memorial Day, up nearly 5% from 2017, according to AAA. That's the highest since 2005.

About 60% of new-car buyers say recent increases in gas prices have had no effect on the type of vehicle they're shopping for, according to Kelley Blue Book.

In other words, the nationwide rush out of passenger cars and into SUVs and crossovers will continue.

Kelley Blue Book's findings indicate that gas would have to reach $4 again for American consumers to make a big change in their car-buying habits.

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