And prices aren’t expected to go down for the remainder of the summer. By the end of August, AAA warned, the price for a gallon of gas is expected to rise by another dime or two. While in Utah, the Beehive State saw a 6 cents a gallon spike in a matter of week, AAA reported, one of the highest rises in the country during that period.
Why are gas prices going up?
According to experts, the answer for why the cost to fill up is so high is no more difficult to understand than lessons learned in a basic economics class — supply and demand.
- “Robust gasoline demand and more expensive crude oil prices are pushing gas prices higher,” said spokesperson Jeanette McGee in AAA’s announcement.
- “We had hoped that global crude production increases would bring some relief at the pump this month, but weekend OPEC negotiations fell through with no agreement reached. As a result, crude prices are set to surge to a seven-year high,” McGee added.
The New York Times reported that global oil production negotiations between the Organization of the Petroleum Exporting Countries (OPEC) and Russia and its allies never restarted on Monday after falling apart late last week.
- As a result, the West Texas Intermediate, a major benchmark of oil prices, rose to its highest in more than six years on Tuesday to $76.98 a barrel, according to The New York Times.
GasBuddy — an app that tracks national gas prices and allows users to find the cheapest gas locally — said in a blog post Tuesday that the national average price for a gallon of gas had gone up nearly 8 cents in the last month and more than 94 cents since last July at this time.
- “Gasoline demand over the holiday weekend certainly did not disappoint as millions of Americans flooded the roads for the long weekend, guzzling down gasoline at a clip not seen in years. In the process, we could have set new all-time records for consumption,” said Patrick De Haan, chief petroleum analysis at GasBuddy, in the company’s statement.
- “As OPEC+ met over the weekend and saw a heated disagreement about raising oil production, WTI crude oil surged in Monday evening electronic trading to nearly $77 per barrel. This was due to higher demand and a lack of additional supply from OPEC amidst a mountain of controversy on how to respond to the market,” De Hann said.
When will gas prices go down?
- “The pandemic has changed the demand pattern. That’s going to keep the pressure on gasoline supplies as people shun mass transit, Kilduff told CNBC. “There’s just not going to be post July 4th relief at the pump that we’re used to seeing. It’s going to be a long, hot summer in terms of what you pay for gasoline.”