Breaking News
US Fuel Prices Hit Seven-Year High
US fuel prices hit a seven-year high Wednesday, as oil supplies remain low even as demand is now back to 2019 levels. As a result, Americans are now paying the highest prices for fuel since 2014.
RELATED: The $3 Per Gallon Gasoline Is Becoming The New Normal
Fuel Prices Post Seven-Year High
According to the American Automobile Association, the national average for a gallon of gas went up to $3.32 Wednesday. This represents the highest average since 2014.
In some areas like California, fuel prices are even higher. California’s Mono county posted prices of more than $5 per gallon. On a statewide level, the Golden state’s average cost is $4.42.
Compared to fuel prices last year, Americans are shelling around a dollar more per gallon. West Texas Intermediate crude futures, the US oil benchmark, hit $77.60 per barrel. In 2020, WTI crude futures traded at $40 per barrel.
Rising Cost Due To High Demand and Low Supplies
Fuel prices are making a comeback as demand rises to pre-pandemic levels. In 2020, demand for fuel dropped significantly as businesses shut down.
Even as demand eventually recovered, the oil supply remained tight. It didn’t help that the recent Hurricane Ida put a seriously hampered oil production in the Gulf of Mexico.
As demand continues to rise, major oil consumers such as the US and India called on OPEC+ to increase production. However, instead of acceding to the request, the coalition of oil producers stayed on schedule.
Their previous commitment was increasing their November output by 400,000 barrels a day. OPEC+ decided to continue with its commitment instead of drawing up a new plan.
OPEC+ Won’t Raise Production Yet On Fears of Weaker Demand
Sources believe that OPEC+’s decision stems from concerns that demand can still fall during the pandemic. Now that member countries are enjoying increased revenue, they do not want to commit to higher supplies only to take it back again when economies shut down.
In fact, OPEC+ introduced record production cuts of roughly 10 million barrels per day in April last year. This is equivalent to 10% of global output.
Meanwhile, the administration of President Joe Biden decided to shelve plans for new fossil fuel drilling leases. They also moved to cut down domestic oil production.
As a result, gas prices steadily climbed this year. Consequently, Americans are now paying the highest fuel prices in seven years.
Granholm Considering Tapping Reserve
Meanwhile, US Energy Secretary Jennifer Granholm said on Wednesday that the White House is considering tapping the country’s reserves to temper fuel prices.
“It's a tool that's under consideration,” Granholm said at an FT energy transition summit. The reserves she referred to are part of the Strategic Petroleum Reserve (SPR).
Traditionally, US presidents occasionally authorized the use of SPR to augment local stocks. The last big release came during the administration of President Barack Obama, who ordered the sales of 31 million barrels in 2011.
The SPR currently holds around 620 million barrels of crude. According to the Energy Department, this is the country’s lowest supply in 18 years.
In addition, Granholm also didn’t rule out crude oil exports. Obama also lifted exports in 2015. “That’s a tool that we have not used, but it is a tool as well,” Granholm said.
Watch the Yahoo Finance video reporting on Gas pump sticker shock: US gas prices still have some way to go:
Loading ...What can you say about the rising fuel prices across America? Do you foresee fuel prices going lower within the year? In addition, will higher fuel prices affect your plans for travel and vehicle purchases?
Share with us your thoughts. Write your comments in the comments section below.
13 Comments
You ain’t seen nothing yet!! With this idiot Administration running the show things are only going to get way more stupid and waaay more expensive. We are fools for letting this happen to this once great country and if we do not stop this communist takeover soon you can kiss this Free Republic goodbye forever!!
The moron in the White House is,taking his marching orders from all of our enemies from which he’s been compromised. He’s sold us out! And to think just 1 year ago the U.S. was energy independent and actually exporting oil.
Thanks a lot, sleepy, dementia joe!
I am well educated, and in the energy business. We will never see the aberrant low rates again from the last couple of years. If you are not on supply contracts (electric and natural gas) now, your only option to avoid higher prices now are long term (3 plus years) contracts still at reasonable prices.
The current administration and ilk have done our country irreparable harm. It is hard to believe any of it is accidental.
Would be wise to find vehicles that accommodate bio-diesel and learn how to make it.
I can remember higher prices than what we are paying now. Actually saw things creep up to almost $5 a gal in CA what with their insistence on “summer” fuels and all the different crap they wanted on cars that eventually destroyed their engines.
All this is merely distraction to the meters that are in Biden’s “infrastructure” bill. Soon, if you want to purchase full-coverage insurance, you will be required to retrofit your vehicle (or on the newer ones, activate) a meter that will keep track of your mileage (as well as all your driving habits) and download that info at the pump so that mileage tax can be added to your gasoline bill. If they find that it is too cumbersome to tally up at the pump, they will get you on your income tax.
You can get around it if you own your vehicle outright and don’t need to carry comprehensive coverage. Liability only will get you your license and tags.
Eventually they will make it mandatory that you have to have a new enough car to track using the built in meter. The newer the car the more impossible it will be to afford to purchase outright so you will be forced into payments which will entail full coverage insurance. That turns into leasing or renting so that the company may be coerced into carrying the insurance if they want to get any customers and if people still want to be able to drive.
Since the government really wants us all off the road, period, we’d better start thinking Amish and get a horse and buggy! Depending on where you live could be less costly to feed and definitely no smog.
When things start to become completely intolerable you would do well to remember those who facilitated the vote fraud that put these communists into power. They will be the ones exempt from the most onerous regulations unless they have been betrayed like everyone else.
Try,convict and hang sleepy joe and camel toe Harris for treason they are in bed with China and all the turban wearing rag heads.
What Melohawk said about getting down to a horse and buggy wouldn’t work because Bide, Harris and the squad would want the horse killed because of its farts. Its hard to understand how anyone could vote these people into office.Term limits and vote them all out.
It wasn’t so long ago during the Trump administration that we were energy independent. Now we’re at the mercy of OPEC again..
#FJB
I second #FJB & BBA. We’ve got to get off our asses and take our country back no matter the cost. We all got to die sometime!!!
Im with hou on this one,best be stocking up on shells because shits gonna hit the fan and when it does people will turn on each other just to get supplies they need .this country hasnt been good for along time and if the people dont stand up and revolt against the government and big corporations this country will never be great again!its a sad way for a once great country to end up so comunist!!!!!
The types that voted for sleepy are these:
Stupid folks who vote democrat because grandmaw and paw voted democrat.
People with no sense of self worth, codependent on government hand outs.
Welfare hood rats
Opportunist, people too lazy to get their own, so they think that a bunch of socialist /communist thugs is going to take from the rich and hand it to them…WRONG!!!! These folks, if and when they ever gain power they simply make everyone equally miserable, freedom deprived, and the only folks who do very well are the top communist elite. Happens every time.