Gas prices continue to rise as the holidays approach
October 17 – Motorists in Berks County faced harsh weather conditions last summer. However, when it comes to the price of a gallon of gasoline, they’re still in the middle of what turns out to be a perfect storm for consumers.
Prices at Berks Friday averaged $ 3.45 a gallon for regulars, according to GasBuddy. That’s up 27 cents on the month and 95 cents on the year for the highest average in seven years.
The average topped $ 3 a gallon in May as demand increased from motorists eager to hit the road after a year of the coronavirus pandemic. This is the first time the price has remained consistently above that mark since the summer of 2018, according to GasBuddy records.
Hurricane Ida crossed the U.S. Gulf Coast about six weeks ago, shutting down key oil refineries in that region for a long time, and the average cost of gas continued to rise. Another factor has been the lack of logistical support, as oil and gas are yet another consumer product waiting to be unloaded at ports and the trucking companies that ship them are experiencing a labor shortage. , according to Forbes.
The last blow came from an old enemy – OPEC.
In recent meetings, the Organization of the Petroleum Exporting Countries, along with major petroleum-producing non-members, agreed not to increase production after previously agreeing that they would. After briefly falling below zero during the coronavirus pandemic in April 2020, the price of a barrel of oil rose above $ 80 last week.
“The main driver of this recent gas price hike is crude oil, which typically accounts for between 50 and 60% of the price at the pump,” AAA spokesman Andrew Gross said. “And last week’s decision by OPEC and its oil-producing allies not to increase production further only added to the upward momentum in crude oil prices.”
OPEC, Russia and their allies have decided to maintain a production cap of 400,000 barrels per day in November instead of the 800,000 barrels per day previously agreed.
In addition, AAA says that gas demand has also increased slightly in the United States, which has contributed to the rise in prices.
“Last week, oil prices hit their highest level in seven years, with one barrel of West Texas Intermediate crude above the critical level of $ 80 a barrel,” said Patrick De Haan, chief analyst. oil for GasBuddy. “The country’s gas prices have also been pushed to their highest since 2014, all on OPEC’s decision not to increase production more than it already agreed in July.
“OPEC’s move sparked an immediate backlash in oil prices, and in the midst of what is turning into a global energy crisis, motorists are now spending more than $ 400 million more on gasoline every day. than just a year ago, ”DeHaan said. “The problems continue to be linked to increased demand as the global economy recovers, combined with significant production cuts early in the pandemic.”
DeHaan says if drivers don’t lower their travel prices, they will continue to increase for the foreseeable future. It’s a tall order with Thanksgiving and Christmas on the horizon.
“If Americans cannot curb their appetite for fuels, we have no other place for prices to rise,” he said.