Gas prices likely highest of year
The U.S. is increasing its oil production faster than ever, and American drivers are guzzling less gasoline. But you’d never know it from the price at the pump.
The national average price of gasoline is $3.69 per gallon and is forecasted to creep higher, possibly approaching $4 by May.
AAA Alabama spokesman Clay Ingram said that the good news is that prices have hit their highest for 2013.
“Prices will likely stay at this level or lower between now and the end of summer, then should drop more during the fall,” he said. “Of course, there are not any guarantees, but that appears to be the trend going forward.”
U.S. oil output rose 14 percent to 6.5 million barrels per day last year — a record increase. By 2020, the nation is forecast to overtake Saudi Arabia as the world’s largest crude oil producer. At the same time, U.S. gasoline demand has fallen to 8.7 million barrels a day, its lowest level since 2001, as people switch to more fuel-efficient cars.
So is the high price of gas a signal that markets aren’t working properly?
Not at all, experts say. The laws of supply and demand are working, just not in the way U.S. drivers want them to.
U.S. drivers are competing with drivers worldwide for every gallon of gasoline. As the developing economies of Asia and Latin America expand, their energy consumption is rising, which puts pressure on fuel supplies and prices everywhere else.
The U.S. still consumes more oil than any other country, but demand is weak and imports are falling. That leaves China, which overtook the U.S. late last year as the world’s largest oil importer, as the single biggest influence on global demand for fuels. China’s consumption has risen 28 percent in five years, to 10.2 million barrels per day last year.