Why is the price of gasoline so high?

One of the main factors driving costs is that OPEC announced last week that it would not increase oil production.

Toledo, Ohio β€” Oil prices have been at their highest for nearly a decade, and drivers are feeling the impact of gasoline pumps.

According to AAA, the national average of 1 gallon of gasoline rose to $ 3.27 on Tuesday. US crude oil exceeded $ 80 a barrel Last week, the highest score since 2014.

Patrick De Haan, Head of Oil Analysis at GasBuddy, said there were several factors contributing to the cost increase, many of which were related to the COVID-19 pandemic. One of the main drivers is OPEC’s announcement last week that it will not increase oil production.

“The reason this is so important is due to the development of the energy crisis, especially abroad in Asia and Europe,” Dehan said. “China lacks coal to power its power plants. Europe lacks natural gas for heating and power generation. Due to low inventory, some of these power plants replace crude oil. Of course, that means increased demand for oil. “

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Gasoline prices in Toledo actually fell 2.5 cents a gallon last week, but many stations on Monday raised prices by more than 25 cents.

Dehan said the Great Lakes region tends to act as a “bell” for gas prices. When the national average goes in a particular direction, it usually occurs first in Ohio, Michigan, and Indiana.

“You are really at the forefront of what happens at gas prices,” Dehan said. “Unfortunately, the national average is rising. In the short term, when prices reach $ 3.25 in Toledo, they should start to fall for the rest of the week,” he said.

Drivers who want to shop at the best prices can save a few dollars, Dehan said. As of Tuesday afternoon, some stations in Toledo were still selling gas for less than $ 3, including Sunoco ($ 2.92) on Suder Avenue and Circle K ($ 2.93) on North Holland-Sylvania Road.

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Dehan also said it’s best to fill it up at the beginning of the week.

“As the week progresses, we’re more likely to see one of those notorious 20-40 cents increases,” he said. “If you track these price spikes, they usually occur once every 7-12 or 14 days, so if you can time them, prices should start to fall moderately for 7 days.”

Other factors pushing up oil costs Including Hurricane Aida, Stopped 95% of production in the Gulf of Mexico in late August. Container ships are running behind schedule around the world, and the United States is experiencing a shortage of truckers.

All of these problems create an unstable environment and make price prediction difficult.

β€œIt’s like a 12-layer cake, but it’s certainly not that tasty,” says De Haan. “I hope it’s not too far from the ceiling this winter. My concern is how high it will be next summer. The big question is how long some of these supply and logistics bottlenecks will be. Is it going to continue? “

Dehan said demand could rise further by the time many travelers who couldn’t go last year are on vacation.

In Michigan Prices rose 12 cents last week We have set a new 2021 high of $ 3.33 per gallon.

“Rising crude oil prices have caused Michigan’s gasoline prices to rise by double digits,” said Adrienne Woodland, a spokeswoman for AAA-The Auto Club Group. Throughout this week. “

Why is the price of gasoline so high?

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