According to the latest AAA report, gas prices increased due to a combination of increased consumer demand due to warm weather and higher oil prices.
The national average cost for a gallon of gas rose to $3.42, 12 cents more than last week and 33 cents more than a month ago. The increase in gas prices was largely due to more drivers taking to the road to take advantage of the recent milder winter weather, AAA said.
“Recently elevated temperatures have led to an increase in pump prices,” AAA Spokesman Andrew Gross said in a statement. “With the cost of oil hitting $80 a barrel, there is a lot of upward pressure on gas prices right now.”
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Higher oil costs keep gas prices up
The surge in fuel demand following China’s rapid reopening contributed to a 47 cent increase in the price of oil. The cost of a barrel of West Texas Intermediate crude rose to $82.11 a barrel, according to GasBuddy last week. The cost of Brent crude also rose 76 cents to $88.39 a barrel.
As the US heads into the colder winter months, increased demand, coupled with less supply, will likely continue to drive oil prices higher and, by default, higher, according to GasBuddy.
“Macroeconomic factors continued to weigh on oil and refined products, as strong demand in China has not significantly slowed the rise in new COVID cases,” Patrick De Haan, GasBuddy’s head of petroleum analysis, said in a statement. “In addition, the release of crude oil from the Strategic Petroleum Reserve has been completed.
“There is growing concern that supply will tighten in the coming weeks without additional oil, especially as the nation begins to move away from softer demand in the height of winter, De Haan continued. “Moving forward , drivers don’t look good. , and prices are likely to continue to accelerate.”
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A new law would limit the use of the Strategic Petroleum Reserve
The Biden administration credited the release of oil supply from the Strategic Petroleum Reserve (SPR) for reducing the price of gas. However, the recently introduced legislative bill HR 21, sponsored by a Republican, would limit the power of the federal government to release from the SPR.
The legislation would impose restrictions on when the SPR can be used to help boost oil supply while production is ramping up. The Biden administration argues that it could also risk raising gas prices and making it more challenging to “offer relief to Americans in the future,” Energy Secretary Jennifer Granholm said in a Monday press briefing.
“It would offer no tangible benefits to the American people,” Granholm said. “Rather, it would affect our ability to be responsive to releasing oil during an international emergency… It could delay allowing the release of oil for domestic emergencies after a natural disaster or pipeline break at home, which which would, again, put prices at risk. increase during – after market shock due to emergencies caused by extreme weather events.”
If Congress passes the legislation, President Joe Biden will veto it, Granholm told reporters.
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