US Gasoline Prices Vault to New 7-Year High

Tom Ozimek
By Tom Ozimek
November 8, 2021Businessshare
US Gasoline Prices Vault to New 7-Year High
Oil tankers drop off crude oil to be refined into gas at the Marathon Oil Refinery in Salt Lake City, Utah, on Oct. 29, 2021. (George Frey/AFP via Getty Images)

Prices of regular gasoline in the United States have risen to a new seven-year high, according to new data from AAA, as elevated crude prices and an uptick in gasoline demand put upward pressure on prices at the pump.

As of Nov. 8, the national average price for a gallon of regular gasoline in the United States rose to a seven-year high of $3.422, up slightly from the previous day’s average of $3.421 and a penny more than the week-ago average of $3.402, according to AAA.

Last week, gasoline demand rose from 9.32 million barrels per day to 9.5 million barrels per day, AAA said, citing recent data from the Energy Information Administration (EIA).

“The slight increase in demand has contributed to price increases, while elevated crude prices continue to put upward market pressure on pump prices,” AAA said in a note.

A separate analysis from Lundberg Survey found that the average price for regular-grade gasoline in the United States jumped by 5 cents over the past two weeks, to $3.49 per gallon, about $1.30 higher than a year ago.

The Biden administration has faced sharp criticism over rising gasoline prices, but it has “no immediate plans” to tap into emergency reserves or limit energy exports outside the United States, the Energy Department told CNBC several weeks ago, while President Joe Biden last week remained noncommittal on ordering a Strategic Petroleum Reserve (SPR) release.

Biden was asked at a Nov. 6 press briefing when he would respond with an SPR release given that “OPEC-plus has snubbed your call to pump more oil,” with the reporter referring to the cartel’s decision earlier in the week to ignore the administration’s request to increase production more sharply, opting instead to stick to a previously agreed plan to gradually raise crude production by 400,000 barrels per day each month.

“I’m not anticipating that OPEC would respond, that Russia and/or Saudi Arabia would respond,” Biden replied. “They’re gonna pump some more oil. Whether they pump enough oil is a different thing.”

The president added that “there are other tools in the arsenal that we have” to get “more energy in the pipeline,” though he did not provide more details except that the administration is “dealing with other countries” and that he would discuss this further “at an appropriate time.”

The Biden administration’s chief plan to ease surging gasoline prices was to persuade OPEC-plus to agree to boost production more sharply to reduce the supply crunch, but, so far, that plan has come up empty-handed.

Energy Secretary Jennifer Granholm was asked in a Nov. 7 interview on CNN whether she anticipates average national gasoline prices to break the $4 per gallon mark in light of the fact that some analysts, including at Bank of America, predict crude oil prices to rise to around $120 per barrel next year.

“We certainly hope not,” Granholm replied. “The president is all over this,” she insisted, adding that “every president is frustrated because they can’t control the price of gasoline because it’s a global market.”

“He can call upon increased supply, which he has done, and OPEC is, unfortunately, controlling the agenda with respect to oil prices. OPEC is a cartel and it controls over 50 percent of the supply of gasoline,” she added.

EIA, in its most recent short-term energy outlook, issued in early October, said that it expects retail gasoline prices to fall to an average of $3.05 per gallon in December, with an updated forecast scheduled for Nov. 9. In the outlook, EIA said the national average gasoline price for 2022 will drop to $2.90 per gallon, down from $2.97 per gallon for all of 2021.

Republicans have criticized the Biden administration for relying on OPEC-plus to deal with rising gas prices, rather than by boosting domestic oil production.

After taking office in January, Biden signed executive orders that shut down the Keystone XL pipeline construction, which would have been able to transport oil from oilfields in Alberta, Canada, into the United States. The administration also put a freeze on some new drilling sites.

From The Epoch Times

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