Gas Prices Keep Rising

Gas Prices Keep Rising

( – For many drivers, gas prices are inducing sticker shock. Every week, the numbers continue to rise to new highs compared to a year ago, leaving less money in consumers’ pockets for discretionary spending. According to AAA, the national average for a gallon of gasoline was $3.22 on Wednesday, October 6. Consumers haven’t seen such high costs since October 2014. Some places in California are charging over $5 per gallon.

Several factors drive gas prices. One of them is the cost of a barrel of oil. A year ago, the West Texas Intermediate crude futures traded a barrel of oil for approximately $40. On Wednesday, it was $77.60. At one point during the day, oil was trading as high as $79 per barrel, also a record since November of 2014.

On the other side of the price increase, supply and demand also play a vital role. Supply is not what it was a few years ago for several reasons. One is that oil producers cut back drilling during 2020 due to low demand. As governors began opening up states last spring, demand rose quickly, but the supply isn’t catching up. As a result, higher prices may be with America for some time.

The problem concerns the White House, and the administration is sending mixed signals. High energy prices aren’t good politics despite the Biden administration’s goals of reducing or eliminating fossil fuels. The administration urged OPEC to increase production over the summer but refused to ask US companies to do so at home.

On Wednesday, the White House suggested opening the national strategic petroleum reserve or prohibiting oil exports to drive down energy prices. Unfortunately, those actions may not do much to alleviate suffering drivers.

Copyright 2021,