Increased demand for gasoline leaves Americans paying more at the pump

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Fueled by a pandemic that left them stir crazy, folks are hitting the road at a robust pace this summer, driving up the demand for gasoline.

At 10 million barrels per day, gasoline demand set an Energy Information Administration record last week, according to the AAA auto club. The nearly 1 million barrel-per-day jump in demand pushed the U.S. average price at the pump to $3.14 per gallon of regular unleaded gasoline.

“Without a doubt, you have two catalysts — the fact that it is the summer driving season and the fact that Americans are coming out of COVID-19,” said Patrick DeHaan, head of petroleum analysis for GasBuddy, a fuel-price tracking company. “The economy is reopening, and a lot of us probably have a lot of cabin fever.”

Crude oil prices, which vacillated last week following OPEC’s inability to reach an agreement on production increases, continue to be a dominant factor in determining how high prices will go this summer. The price of West Texas Intermediate, the U.S. benchmark for oil, traded at about $74 a barrel Monday.

“Peak summer driving season is in full-swing as Americans hit the road to explore, and gas prices are not backing down,” AAA Oklahoma spokesperson Leslie Gamble said in a statement. “Motorists are paying, on average, nearly a dollar more a gallon than last summer to fill up and close to 40 cents more than in 2019.”

For the week, roughly 25 state averages grew at least 2 cents, with a few seeing a jump of 9 cents or more. State averages range from as low as $2.76 in Mississippi to as expensive as $4.31 in California.

Oklahomans are paying on average $2.87 a gallon, the ninth lowest price in the nation. That is nearly a dollar a gallon more than during the pandemic one year ago.

Four other states with the lowest gasoline prices touch Oklahoma: Texas ($2.82), Missouri ($2.82), Arkansas ($2.84) and Kansas ($2.86).

“Oklahoma and Tulsa are generally places that have some of the cheapest prices in the country,” DeHaan said. “You have good access to refineries. You have the infrastructure pipeline that supplies gasoline and a lot of good old-fashioned competition combined with low gasoline taxes.”

Gasoline prices could stabilize in early July or early August, DeHaan said. But going forward, how much people pay will depend on many variables, including how the delta variant of COVID-19 affects the country.

“More offices are reopening,” DeHaan said. “Schools are reopening. That may usher in a return, in some form, of the U.S. commute. That could have an impact on demand, too. There are just a lot of wild cards at play.

“We’ve been at $70 now (per barrel of oil) for maybe the last four to six weeks. Is OPEC going to raise production? Will U.S. producers start to respond? Seventy-five dollars, however, is a pretty good price compared to where we were a year ago.”


This article originally ran on tulsaworld.com.

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