Gas prices

Limited production and increasing demand will push retail gas prices higher, and they may top $3 a gallon this summer, industry analysts say.

Retail gas prices in Ohio have fallen nearly 0.3 cents per gallon in the past week, according to a survey of 5,345 stations in Ohio. The survey said as of Monday, the retail price of a gallon of gas averages $2.78/gallon.

But U.S. motorists may want to brace themselves for the possibility of paying $3 a gallon for gas in the coming weeks, according to a leading retail gas analyst.

“... as demand remains strong as Americans take to the roads, the question going forward is how much demand will continue to recover and rise, (and) will it lead to record summer gasoline demand,” Patrick De Haan, head of petroleum analysis for gasbuddy.com, said Monday in releasing his weekly gas price summary.

Gas prices in Ohio are 0.9 cents per gallon lower than a month ago and stand $1.21 per gallon higher than a year ago, when, in the early stages of the coronavirus pandemic, gas was $1.57 a gallon.

According to GasBuddy price reports, the cheapest station in Ohio was priced at $2.20 per gallon Monday while the most expensive was $3.03 a gallon, a difference of 83 cents per gallon.

The national average price of gasoline has risen 0.7 cents per gallon in the last week, averaging $2.89 per gallon Monday. The national average is up 1.8 cents per gallon from a month ago and stands $1.13 higher than a year ago.

“The nation’s gas prices perked up again last week as oil prices advanced to fresh multi-year highs on COVID improvements overseas and the switch to summer gasoline, which is basically now complete,” said De Haan. “Last week saw the national average hit its highest level in two years.”

As retail gas prices rise, media reports note that the GOP is blaming the Biden Administration. “Since President Biden took office, average gas prices are up more than 50 cents a gallon,” Florida GOP Senator Rick Scott said last week. The New Republic magazine noted that the Koch-backed Institute for Energy Research has echoed the charge.

De Haan though, said the timing is related to the prevalence of the COVID vaccine, and Americans making plans to travel after being restricted by the pandemic for the past year.

Similarly, with fewer motorists driving fewer miles, oil companies restricted production, and that production has not rebounded fully, leading to tighter demand, fueling rising prices.

“As demand rebounds, prices go up,” he said.

De Haan dismissed the effect that Biden’s executive orders banning new oil and gas drilling on federal lands would have because oil companies had slowed production last year in response to less demand, and are not fully online again yet.

And while Biden rescinded permissions to complete construction of a segment of the Keystone XL Pipeline, those lines were not in full production mode anyway, De Haan added.

De Haan said he expects it will be Memorial Day or after, when the summer driving season is in full swing, when gas prices threaten the $3 a gallon level.

“Today’s prices are due to substantially limited production and increasing demand pushing prices higher.

“We indeed may see some weeks with new records as Americans get in their cars this summer — but the question is how many will do so? That will determine how much higher prices will go,” De Haan said.

GasBuddy data is accessible at http://FuelInsights.GasBuddy.com.

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