Americans And The Burdensome Gas Prices
Americans are paying more for gas than ever before, thanks to a classic struggle between soaring demand and limited supply. Such spikes affect all Americans, whether they’re born and raised in the country or are part of Somali communities that have moved here. According to one survey, gas prices in the United States have now reached their highest average rates since 2014.
Things have gotten much worse. According to the US Energy Information Administration, gas prices will continue to rise in 2022, reaching rates not seen since middle of the previous decade. Prices rose steadily throughout past year’s October, peaking at $3.40 per gallon on November 22.
The reasons are pretty straightforward and straight out of an economics textbook. It all revolves around supply and demand. Although the pandemic hasn’t subsided, Americans have returned to the road sand are commuting more this year, and a mix of local supply disruptions and global energy market turmoil has raised crude oil prices.
Demand Increased As People Returned To the Roads
The COVID-19 outbreak drastically altered how Americans move, like so many other elements of daily life. Trips were cancelled and commutes were drastically reduced due to lockdowns and the disease’s unchecked early spreading.
But by mid-2021, people were found outside planning their getaways. The amount of car miles traveled as assessed by the Federal Highway Administration fell in spring 2020, but in recent months, highway traffic has returned to levels observed before that period. The excessive driving by Americans also shows an increment in demand for automobile fuel.
The US Oil Supply Hasn’t Been Able to Match The Ever-Growing Demands
Coupled with increased demand, there were significant supply difficulties. In late August, Hurricane Ida closed down a huge portion of the United States’ oil drilling and processing capability in the Gulf of Mexico.
Although rigs and facilities have rapidly reopened, crude oil stockpiles have remained low, indicating a continued supply shortage. According to the EIA, oil held at Cushing, Oklahoma, one of the country’s biggest petroleum reserves, dropped down to 40% since the year’s start.
Additional EIA data reveals that crude oil stockpiles are still low across the nation. High energy prices result from a shortage of domestic oil supplies and stocks combined with increased demand.
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