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Gasoline prices have jumped in the past month, as the average price of regular unleaded jumped 37 cents in the Las Vegas metropolitan area.
Locally, the average price fell from $ 2.84 a month ago to $ 3.21 on Monday, according to AAA.
Silver State’s average gas price also rose 37 cents last month, while the national average jumped 38 cents, according to AAA data. The price at the pump has climbed 72 cents since November 20.
“This increase is not something that is just isolated in the West,” said Sergio Avila, spokesman for AAA Nevada. “It’s something happening all over the country. Each state’s average has climbed double digits since February, resulting in one in 10 gas stations with pump prices of $ 3 a gallon or more. “
Lundberg Survey industry analyst Trilby Lundberg said the spike in prices was due to rising crude oil costs, the lingering effect of power outages that resulted in the shutdown or downsizing of several refineries. Texas last month, and soaring credit prices for renewable fuel.
Patrick De Haan, chief oil analyst for GasBuddy.com, said it comes down to supply and demand.
“Over the past two months, as we’ve started to see improvement with the pandemic, Americans have found places to go,” De Haan said. “Demand for gasoline is now just below what it was before the pandemic.”
Growing demand
De Haan attributes the rise in motorists on the country’s roads to continued vaccine rollouts, states easing coronavirus restrictions and people returning to work.
Despite this increased demand, oil producers who cut production during the pandemic have yet to restart, De Haan said.
“This is why prices have increased since November of last year,” De Haan said. “Everyone likes to point out that the elections were held in early November, but also the fact that the vaccine was in place and coming. There was great promise to bring demand for oil back to where it might be otherwise. “
De Haan said the increase in gasoline prices was unrelated to President Joe Biden taking office, as many have speculated online.
“Apparently there are thousands of oil analysts in the closet deciding what is driving prices,” De Haan said. “While gasoline demand has largely recovered to its level of just under a year ago, many other fuels have not – jet fuels being one of them. The fact that before COVID there was no shortage of pipeline capacity at all, there is no shortage of pipeline capacity, given how even lower the volumes are. “
Biden’s decision to halt work on the Keystone pipeline does not affect gas prices at this time, De Haan said.
“If you take a pipeline that has been in use and has been relied on for years, you will have a problem,” he said. “But just taking a pipeline that doesn’t work out of the equation isn’t something that would cause prices to rise significantly. If there is enough crude oil production going forward, we may need that pipeline capacity, but it won’t be for years. “
No relief soon
Another misconception is that Biden banned hydraulic fracturing, also known as hydraulic fracturing, which many have pointed out as one of the reasons for the rise in gas prices. De Haan said that was wrong because Biden put in place a 60-day moratorium on new wells on federal lands, which went into effect in January.
He noted that oil companies produce around 10 million barrels of oil per day, below the 13 million barrels per day they produced a year ago.
“Until we get back to the pre-pandemic level of 13 million barrels per day, no oil company will seek to plant a new drill in the ground, whether on federal or private land,” he said. .
De Haan expects prices to continue rising until oil producers increase production, which he doesn’t see happening anytime soon.
Avila agreed and noted that crude oil prices are at a two-year high. Benchmark US crude oil climbed 57 cents Monday to $ 66.18 a barrel in electronic trading on the New York Mercantile Exchange.
“Crude oil prices are about 50 percent of the price drivers pay at the pump,” Avila said. “With refinery utilization at an all time high, gasoline supply tightening, demand increasing slightly due to loosening restrictions and crude prices on the rise, cheap prices are in the rearview mirror for the United States. immediate future. “
Contact Mick Akers at [email protected] or 702-387-2920. To follow @mickakers on Twitter. The Associated Press contributed to this report.
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