Why gasoline prices will likely go higher
Posted: Wed May 11, 2022 11:51 am
... and so will oil prices.
High gasoline prices may last for years. E&E News.
Gasoline and diesel prices hit new records yesterday, touching off a war of words between President Joe Biden and Senate Republicans on the direction of the economy. The national average price for regular gasoline hit $4.37 a gallon, and diesel hit $5.50, according to AAA. Those are both all-time highs. Gasoline averaged $2.97 per gallon a year ago. The roots of the price spike go back to the beginning of the pandemic and will be hard to fix, analysts said. The oil industry shut down oil fields, laid off workers and closed refineries at the beginning of the pandemic, when the recession and lockdowns cut into fuel consumption. As people returned to work, there was less oil available to meet the demand, said Devin Gladden, a spokesperson for AAA.
Why US gas prices are at a record, and why they'll stay high for a long time. CNN Business.
Russia's invasion of Ukraine is a major reason that US drivers are paying record prices for gasoline. But it's not the only cause of the spike. Oil prices plunged when pandemic-related stay-at-home orders around the world crushed demand in the spring of 2020, and crude briefly traded at negative prices. In response, OPEC and its allies, including Russia, agreed to slash production as a way to support prices. And even when demand returned sooner than expected, they kept production targets low. US oil companies don't adhere to those types of nationally mandated production targets. But they have been reluctant or unable to resume producing oil at pre-pandemic levels amid concerns that tougher environmental rules could cut future demand.
Don’t look to oil companies to lower high retail gasoline prices. Federal Reserve Bank of Dallas.
The rise of U.S. retail gasoline prices in March 2022 has triggered a debate about whether U.S. oil companies are doing enough to rein in high gasoline prices and whether these companies should be held accountable for not increasing the production of crude oil. We take a closer look at the premises underlying this debate. We show that, even though the price of oil makes up over half of the retail price of gasoline, oil companies play an extremely limited role in how retail gasoline prices are set. We discuss why, in many regions, pump prices have not fallen as quickly as oil prices have recently and explain why this asymmetry need not be an indication of price gouging.
High gasoline prices may last for years. E&E News.
Gasoline and diesel prices hit new records yesterday, touching off a war of words between President Joe Biden and Senate Republicans on the direction of the economy. The national average price for regular gasoline hit $4.37 a gallon, and diesel hit $5.50, according to AAA. Those are both all-time highs. Gasoline averaged $2.97 per gallon a year ago. The roots of the price spike go back to the beginning of the pandemic and will be hard to fix, analysts said. The oil industry shut down oil fields, laid off workers and closed refineries at the beginning of the pandemic, when the recession and lockdowns cut into fuel consumption. As people returned to work, there was less oil available to meet the demand, said Devin Gladden, a spokesperson for AAA.
Why US gas prices are at a record, and why they'll stay high for a long time. CNN Business.
Russia's invasion of Ukraine is a major reason that US drivers are paying record prices for gasoline. But it's not the only cause of the spike. Oil prices plunged when pandemic-related stay-at-home orders around the world crushed demand in the spring of 2020, and crude briefly traded at negative prices. In response, OPEC and its allies, including Russia, agreed to slash production as a way to support prices. And even when demand returned sooner than expected, they kept production targets low. US oil companies don't adhere to those types of nationally mandated production targets. But they have been reluctant or unable to resume producing oil at pre-pandemic levels amid concerns that tougher environmental rules could cut future demand.
Don’t look to oil companies to lower high retail gasoline prices. Federal Reserve Bank of Dallas.
The rise of U.S. retail gasoline prices in March 2022 has triggered a debate about whether U.S. oil companies are doing enough to rein in high gasoline prices and whether these companies should be held accountable for not increasing the production of crude oil. We take a closer look at the premises underlying this debate. We show that, even though the price of oil makes up over half of the retail price of gasoline, oil companies play an extremely limited role in how retail gasoline prices are set. We discuss why, in many regions, pump prices have not fallen as quickly as oil prices have recently and explain why this asymmetry need not be an indication of price gouging.