Gas Prices Surge Once Again As Oil Prices Rise to a Seven-Year High

October 12, 2021 Topic: Gas Prices Blog Brand: Politics Tags: Gas PricesGas DemandOPECCyber AttacksHurricane Ida

Gas Prices Surge Once Again As Oil Prices Rise to a Seven-Year High

“If Americans can’t slow their appetite for fuels, we’ve got no place for prices to go but up.”

 

The average price of gasoline often drops in the fall months, as demand from summer driving drops, And while there were hints of that happening right after Labor Day, prices have begun to rise once again.

GasBuddy said Monday that the average gas price in the United States rose 5.2 cents over the last week to $3.25 per gallon. That’s a gain of 7.5 percent from a month ago, and over $1 from this time last year, although the number last year was unusually low due to the pandemic.

 

What’s the reason for the rise? It’s all about oil prices, brought about by a key decision last week from OPEC.

“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 on Monday. This happened despite demand for gasoline dropping last week, for the second week in a row.

“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.”

GasBuddy reported that the most common gas price was $3.09 per gallon, a ten-cent increase over the week before, while the median gasoline price in the United States is now $3.14 per gallon, a seven-cent week-over-week increase.

In a report last Friday, which cited Energy Information Administration (EIA), AAA stated that the national average for gasoline had risen by four cents to $3.24—the highest average gas price since 2014.

The recent surge follows many years of low gas prices in the United States, with gas briefly going below a $2 per gallon average in 2020, after the pandemic caused demand to crash. The average gas price has risen this year as the economy has recovered from the pandemic, demand has increased, the global price of oil has gone up, and there have been multiple disruptions of supply in the United States, caused by cyberattacks and natural disasters.

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.

Image: Reuters