National average gas prices are currently $3.52 per gallon, according to data from the Energy Information Administration, reflecting a rapid increase from a $3.33 per gallon reading earlier this month and a $3.42 per gallon reading at the same time last year. AAA said in an analysis that the increasing costs reflect moderating temperatures and changes in the oil market.
“The recent rising temperatures led to rising pump prices,” AAA spokesman Andrew Gross remarked. “And with the cost of oil hitting $80 a barrel, there is a lot of upward pressure on gas prices at the moment.”
West Texas Intermediate, the American benchmark for crude oil, was nearly $73.00 per barrel toward the beginning of the month; the metric surpassed $80.00 per barrel on Wednesday. Brent Crude, the European benchmark, increased from $77.00 per barrel to more than $86.00 per barrel over the same time horizon.
“Crude prices rose at the end of last week due to increased market optimism that crude demand may be more robust than expected this year,” the AAA report said. “In particular, the market believes that the re-opening of China’s economy, despite high coronavirus infection rates, will help to bolster global crude demand, while supporting elevated prices. For this week, crude prices could continue to climb if ongoing market optimism persists.”
[If it doesn’t go back up, it will only be because of a recessionary economy reducing demand. The only ways to solve the supply-demand issue is to either increase supply substantially or dampen demand. The Fed can only try the latter by discouraging lending; the Biden administration refuses to try the former. — Ed]
Join the conversation as a VIP Member