US Gas Prices Inch Higher as Oil Costs Stay Elevated

A sign displays gas prices at a gas station in Falls Church, Va., on July 19, 2022. (Saul Loeb/AFP via Getty Images)

Gas prices at the pump rose over the past week in the wake of higher oil prices, with experts foreseeing more increases as long as oil costs remain elevated.

The national average price for regular gas has risen by roughly 8 cents per gallon over the past week to more than $3.66 per gallon as of April 16 from $3.58 a gallon, according to data from American Automobile Association (AAA). That’s an increase of 20 cents compared to a month ago.

The national average gas price has risen every day since March 29.

AAA points to the high cost of oil, which is the key ingredient of gasoline, as the “main culprit,” according to an April 13 statement. Oil is currently trading above $80 per barrel.

“When the cost of crude oil crosses the $80 a barrel mark, that puts a lot of upward pressure on what we pay at the pump,” said Andrew Gross, AAA spokesperson. “And as long as oil costs remain at the current level, drivers will likely see incremental price increases for now.”

California, where gas costs $4.90 per gallon, is the most expensive state, and Mississippi is the cheapest, with gas at $3.17; seven had gas prices exceed $4 per gallon.

In the week between April 6 and April 13, Arizona, Indiana, Nebraska, North Dakota, and South Dakota saw the largest increases in gas price averages.

Gasoline Stocks, Rising Oil Prices

According to data from the Energy Information Administration (EIA), gasoline demand dropped to 8.94 million barrels per day (bpd) in the week that ended on April 4 from 9.3 million on March 31. Gasoline stocks fell to 222.2 million barrels from 222.6 million during this period.

“Lower demand would typically push pump prices down; instead, elevated oil prices have pushed them higher. If oil prices continue to rise, pump prices will follow suit,” AAA stated.

In the international market, Saudi Arabia and OPEC+ crude oil producers have announced additional production cuts of 1.16 million bpd. At the same time, China has been importing large quantities of oil following its economy reopening. These factors have contributed to boosting oil prices.

“The price of energy will go up,” James Hill, CEO of MCF Energy, told The Epoch Times. “This is a major cutback and significant with China coming out of their COVID lockdown and becoming a competitor for the current energy supplies.”

Research and business intelligence company Rystad Energy estimates that oil prices could top $100 per barrel in the second half of 2023.

Downplaying Production Cut Impact

The Biden administration has downplayed the impact of OPEC+ production cuts. In October 2022, President Joe Biden threatened Saudi Arabia with consequences if OPEC+ were to continue with production cuts.

During a press briefing on April 5 following the latest OPEC+ cuts, National Security Council spokesman John Kirby insisted that the Biden administration’s responses to these two incidents weren’t inconsistent since the events aren’t alike.

“Your question presupposes that with every muscle movement, at whatever interval, we have to react in exactly the same way,” he said when pressed about disparate responses. “The situation is different now than it was last year, and I stand by everything that we said about it.”

Last month, House Majority Leader Steve Scalise (R-La.) announced a new reform package aimed at restoring U.S. energy independence and protecting American families.

“To lower costs for Americans and grow our economy, we need to get the federal government out of the way,” House Speaker Kevin McCarthy said, according to a statement on March 9.

“The Lower Energy Costs Act will fast-track American energy production, and includes comprehensive permitting reforms that will speed construction for everything from pipelines to transmission to water infrastructure.

“And it ensures that the critical minerals needed for advanced technologies come from America—not China.”