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Gas prices now highest since 2014 amid supply chain concerns

AAA is reporting that the national average per gallon of regular unleaded gasoline has now risen two cents to $3.204. The average is the highest it has been since October of 2014 with California at the highest average price of $4.414 per gallon and Mississippi at the lowest, averaging $2.829. 

Beyond being the highest they’ve been in almost seven years, gas prices have also risen more than a full dollar, from $2.186, since October 2020. The price increases at the pump are likely the result of the slight uptick in demand due to the significant rise in oil prices. AAA spokesperson Andrew Gross attributes the rise in oil prices to the coronavirus pandemic.

“Global economic uncertainty and supply chain concerns caused by the lingering COVID-19 pandemic could be playing a role in keeping crude oil prices elevated,” he said. “But, there may be some relief on the horizon due to the news that [the Organization of Petroleum Exporting Countries] and its allies might ramp up production increases faster than previously agreed.”

Due to the coronavirus pandemic, demand for crude oil decreased because of travel restrictions. The OPEC had cut its oil production but is ramping up production once again now that economic activity and travel are returning to normal.

Jeffrey Born, Northeastern University energy market expert, told CBS News, “In short, I think we are having supply-chain problems.” Total domestic gasoline stocks in the U.S. increased slightly this week from 221.6 million barrels to 221.8 barrels. Additionally, gasoline production has already risen a little more than 800,000 barrels per day from this time last year, which puts the total at roughly 9.7 million barrels per day.

OPEC originally decided on a steady increase in production of roughly 400,000 barrels of oil per month until next April. Saudi Arabia, the functional head of OPEC, has already increased output to near pre-COVID levels to about 9.8 million barrels of oil per day.

Some were hoping the OPEC would increase its output by a more significant figure, but Monday, the organization decided to keep the gradual increase. The U.S. currently imports just under one million barrels per day, which accounts for about 10 percent of its total oil production.

ARTICLE: ELIZABETH HERTZBERG

MANAGING EDITOR: CARSON CHOATE

PHOTO CREDITS: KSBY.COM

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