There’s still no end in sight for rising gasoline prices. At this time of the year, fuel prices usually go down. However, this year saw gasoline prices reach a seven-year high in October.
According to the American Automobile Association, the price of gas is now almost double what it was a year ago. In fact, the current national average for regular unleaded gas rose to $3.36.
Gasoline Prices Are High, But Won’t Impact Holiday Travel
While the prices are maddeningly high, many experts don’t expect an impact on holiday travels, One, Americans will insist on traveling during Thanksgiving and Christmas.
Families will definitely need to cut back on expenses, but fuel won’t be one of these items. Many will prefer spending the holidays with friends and family.
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In addition, many experts are banking that gasoline prices will go down around Thanksgiving. Right now, crude oil prices are high due to high demand and low production.
The oil-producing Gulf States are still getting their act together rebuilding from Hurricane Ida. For now, gasoline prices will get worse before they get better.
Crude Prices Remain High, Which is Why Gasoline Prices Are High
Crude oil prices remain high due to lower-than-expected stocks. The Energy Information Administration (EIA) reported that total domestic gasoline stocks decreased by 5.4 million bbl to 217.7 million bbl last week.
However, demand for gasoline went up from 9.19 million barrels per day to 9.63 million. With the US economy in high gear as it continues to rebuild its economy, demand for oil and gasoline remains high.
However, supply remains tight, which reflects on pump prices. As long as crude oil prices remain above $80 per barrel, expect gasoline prices to remain very expensive.
Right now, all states are showing prices above $3 per gallon. Oklahoma gasoline prices are on average $3.01 per gallon of regular unleaded. In contrast, California’s average gas prices come in at $4.54 per gallon.
West Texas Intermediate Crude Supplies Remain Tight
Meanwhile, West Texas Crude prices went down by almost a dollar to close at $82.50 last Thursday. However, prices went back up after the EIA reported on the shortfall in domestic crude stocks.
Total domestic crude inventories decreased slightly to 426.5 million bbl, which means it’s 13% lower than last year’s levels. At present, WTI is trading at $84.48 per barrel.
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Hopefully, once the Gulf States resume regular production, US crude inventories will go back to their normal levels.
Tetsu Emori, CEO of Emori Fund Management, said it also didn’t help that speculators are keeping prices high. “With firm fuel demand in the United States amid tight supply, oil market’s tone stayed fairly strong, which prompted some speculators to unwind short positions,” he noted.
After a year of lower consumption, the United States is now consuming gasoline and distillate along with its five-year averages. The US is the world’s largest fuel consumer.
Watch the WION news video reporting that US crude hits seven-year high as global supply remains tight:
Do you have plans to travel by car this coming holiday season? Will you change your plans due to higher gasoline prices?
Let us know what you think about the spiraling costs of fuel. Share your comments in the comments section below.