Why Do Gas Prices Keep Going Up?

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Gas prices in the U.S. had been expected by some to come back down to Earth a bit once the fall season got underway, but that hasn’t happened. Instead, the prices at the pump have continued to go up–even from the beginning of last week.

On Monday, per AAA, the average price of gasoline was $3.27 a gallon. As of Thursday, it had risen to $3.29. And it’s tied to the price of oil.

Gas Prices Keep Going Up: Why?

“According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 2 million bbl to 223.1 million bbl last week. Gasoline demand also fell from 9.43 million b/d to 9.19 million b/d. Typically, lower demand alongside a decline in stocks would result in downward market pressure on pump prices. But high crude prices (above $80 per barrel) remain the main culprit for rising pump prices. As crude prices remain elevated, pump prices will likely follow suit,” AAA said on its website.

“Given supply concerns, the market continues to bolster prices [higher] because of tight supply,” the site added.

In the last week, AAA said, prices rose 11 cents in Ohio, 11 cents in Alabama and Virginia, 10 cents in Delaware and Washington, D.C., and 9 cents in Maine, Maryland, Louisiana, New Hampshire and South Carolina.

On Monday, GasBuddy listed the average price as $3.25 a gallon, also attributing the rise to the crude oil price rally, as well as the recent announcement by OPEC that it would not be raising prices. The site called that price the highest since 2014, which was also the last year that the average gas price was over the $3 mark. GasBuddy also reported that demand was down.

“Last week saw oil prices advance to their highest in seven years, with a barrel of West Texas Intermediate crude oil surpassing the critical $80 per barrel level. The nation’s gas prices were also pushed to their highest since 2014, all on OPEC’s decision not to raise production more than it already agreed to in July,” Patrick De Haan, head of petroleum analysis for GasBuddy, said in a blog post.

“The OPEC decision caused an immediate reaction in oil prices, and amidst what is turning into a global energy crunch, motorists are now spending over $400 million more on gasoline every single day than they were just a year ago. The problems continue to relate to a surge in demand as the global economy recovers, combined with deep cuts to production from early in the pandemic. If Americans can’t slow their appetite for fuels, we’ve got no place for prices to go but up.”

 Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

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