US Gas Prices Rise to New 7-Year-High With No Drop in Sight
U.S. gas prices rose on Columbus Day to $3.27 a gallon, a new 7-year-high.
The cost of a gallon keeps rising, with some experts saying no drop is in sight.
The primary drive is the climbing price of crude oil, analysts say.
That accounts for between 50 percent and 60 percent of the price of gas for drivers, according to the American Automobile Association (AAA) spokesman Andrew Gross.
“And last week’s decision by OPEC and its oil-producing allies to not increase production further only exacerbated the upward momentum for crude oil prices,” Gross said in a statement.
AAA pegged the national average for a gallon at $3.18 on Sept. 30, $3.20 on Oct. 4, and $3.21 on Oct. 7.
Washington saw the biggest jump over the past week at 17 cents. Kentucky, Indiana, Florida, Michigan, Alabama, Tennessee, South Carolina, Illinois, and Delaware prices per gallon also increased by 10 cents or more.
Data compiled by GasBuddy, which receives price reports from over 150,000 stations across the country, had the average price per gallon at $3.25 on Monday. Diesel’s average rose about 10 cents per gallon in the last week and was at $3.45.
Patrick De Haan, head of petroleum analysis for the price tracker, also pegged OPEC’s decision as stoking the latest rise.
OPEC opted last week to stick to its pact for a gradual increase in oil output.
“The OPEC decision caused an immediate reaction in oil prices, and amidst what is turning into a global energy crunch, motorists are now spending over $400 million more on gasoline every single day than they were just a year ago,” De Haan said in a statement.
Prices shot up earlier this year when Colonial Pipeline took offline the nation’s largest pipeline in response to a hack and have remained above $3 for most of the time since.
Other contributing factors include cuts to production early in the pandemic and a dearth of fuel truck drivers as other jobs prove more attractive, according to experts. The situation was exacerbated by oil producing countries, largely in the Middle East, choosing not to ramp up production.
Europeans and Asians have seen energy shortages and blackouts over the summer and Americans could see the same this winter, one top energy executive recently warned.
West Texas International, a major type of crude oil, increased by $1.05 late Friday to end the trading session at $79.35.
The Biden administration hoped to pressure OPEC into boosting production but has thus far failed in its campaign.
Daniel Yergin, a historian who studies oil, said Monday on Bloomberg that the United States will likely keep trying to persuade the countries.
“Joe Biden knows that high gasoline prices are not good for incumbents,” said Yergin, vice chairman of IHS Markit. “We’ll certainly be hearing more from the administration.”