What Is Really Pushing Gas Prices: Supply Or DemandBy Darcie Perkins on February 9, 2011, 9:56 am
“Oil has traded right around $90 a barrel since the start of the new year and it looks like it may stay at this price throughout February, assuming the situation in Egypt does not worsen and hinder transports on the Suez Canal,” AAA Auto Club South spokeswoman Jessica Brady said in a news release. “The economic recovery has not taken off as many investors expected and, instead, fuel demand has decreased. Retail gas prices will likely remain relatively unchanged this week.”
Automakers think higher gasoline prices will help them sell the latest fuel-efficient vehicles they feel they are under increasing government mandate to build. General Motors North American chief Mark Reuss said Saturday that the automaker has contingency plans for selling vehicles as gas prices increase, starting with the ability to build 40,000 Chevrolet Volt plug-in extended-range electric cars next year.
The USA consumes 400 million gallons of gasoline every day. This red hot demand for gas has pushed gas prices to record highs. Gas prices in the USA/Canada often vary significantly. In many areas, gas prices can vary by 20-30 cents per gallon or more within a very small area. This makes it even more important for motorists in the USA/Canada to shop around to find the best deal on gas.
The national average for a gallon of regular gasoline was $3.124 on Friday, according to AAA, Wright Express and the Oil Price Information Service. That’s up 2.4 cents in the past week. Analysts expect prices to stay at $3 a gallon or higher — perhaps rising as much as 8 cents over the next two weeks — until the conflict in Egypt is resolved and tensions ease in neighboring countries. The pump increases come at a time when U.S. gasoline inventories are at an 18-year high of 236.2 million barrels. Crude oil imports are up, too, averaging 9.1 million barrels a day in the past four weeks, which is 641,000 barrels a day more than the four-week period in 2009.