Oil prices hit 15-month highs this week and supply is down. Guess what that means?
The national average for gas is 14 cents higher than a year ago. It’s likely to go higher still.
Rising crude prices and declining U.S. supply are pushing wholesale prices up rapidly, and that hasn’t been fully reflected at the pump yet, USA Today says.
We could be headed for a 15-cent increase in the next two weeks, according to expert predictions.
“First and foremost, the political problems in Egypt are driving crude oil prices, but there has also been a sharp drop in oil supplies the past two weeks,” GasBuddy.com senior analyst Patrick DeHaan told the paper. “This is coming at a time when demand is at its annual July peak.”
U.S. supply is down even as our production is at a 20-year peak, NBCNews.com says. We’re generating 7.4 million barrels of oil a day, the highest since the start of 1992. But as global demand has increased, the industry has recently become more efficient at shipping oil from the heartland to the coasts for export.
That’s pushing the price of our oil closer to the global price, NBCNews.com says, which means more pain at the pump.
The effect is likely to hit the Midwest hard and fast, as it did earlier this year when prices reached $4.25 a gallon there, USA Today says. Michigan, Indiana and Ohio are seeing major hikes already — 16 cents in the past week.
What can you do about it? Check out our recent post, How to Increase Your Mileage by 70 Percent.