Motorists have had to shell out more at the pump as gas prices have hit a yearly high and the highest level in years.
Gas prices rose two cents per gallon over the past week to $3.20, the highest level since October 2014 as a result of high crude oil prices over $73 a barrel, according to AAA.
Domestic gas demand rose more than 5% from 8.9 million barrels per day to 9.4 million barrels per day, according to the Energy Information Administration. But gas production at facilities like the BP Whiting Refinery remains lower than pre-pandemic levels as as the petroleum industry recovers from Hurricane Ida's disruption.
“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,” said Molly Hart, spokesperson for AAA — The Auto Club Group. “But, there may be some relief on the horizon due to the news that OPEC and its allies might ramp up production increases faster than previously agreed.”
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Motorists are now paying an average of $3.19 a gallon in Lake County, $3.29 a gallon in Porter County, $3.23 a gallon in LaPorte County, $3.30 in Newton County, and $3.19 a gallon in Jasper County, according to the gas price-tracking website Gasbuddy.com.
Statewide, gas prices are up 7.4 cents over last week to an average of $3.19 a gallon in Indiana, according to GasBuddy.com. That's up $1.11 per gallon as compared to a year ago.
The average gas price in the Gary metropolitan area that encompasses most of Northwest Indiana stood at $3.21, up 11.7 cents as compared to the previous week and up $1.11 as compared to a year ago.
“We’ve seen very little overall movement in gas prices over the last week with prices remaining near their 2021 highs as crude oil prices remain well above $70 on supply concerns and strong global demand,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “With energy in high demand ahead of the winter heating season and a surge in global demand due to COVID-induced imbalances, we’re not likely to see a meaningful decline at the pump any time soon, but unfortunately, could see prices holding near these levels for the next few weeks.”
Crude oil prices rose 85 cents Friday to $75.88 a barrel, but there's hope that OPEC could move forward with an agreement to produce an added 400,000 barrels per day next month.
Oil inventories currently stand 7% lower than the five-year average but rose by 4.6 million barrels, according to the Energy Information Administration's report last week. Refinery utilization rose 0.6 percentage points to 88.1% as domestic production rose by 500,000 barrels per day as Gulf of Mexico oil production resumed after Hurricane Ida.
With production still lagging behind demand, prices at the pump have risen to a yearly high.
"Overall, prices remained near 2021’s peak price set in early August due to COVID-19 supply and demand imbalances,” De Haan said. “Relief in average gas prices has really only shown up west of the Rockies thus far, and may continue to be delayed by an active hurricane season which has prevented gas prices from their normal seasonal decline. While I am optimistic that we eventually will see a decline in price, the drop is not likely to be as noticeable as I had anticipated due to the above average hurricane season and as demand remains seasonally strong.”
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