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Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

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U.S. Gas Prices Rise, but not because of Global Factors

U.S. Gas Prices Rise, but not because of Global Factors

Global energy markets are jostling between the return of Libyan crude oil and lingering tensions over Ukraine. It's domestic supply and demand issues, however, that are weighing on U.S. gasoline prices, AAA said Monday.

Prices waxed and then waned amid dueling overseas developments. Last week, Russian President Vladimir Putin warned European energy security was at risk because of Kiev's debt obligations. The state-run oil firm in Libya, however, said the port of Zawiya and associated oil infrastructure were open and operating normally after protesters there ended their blockade.

West Texas Intermediate traded Monday morning at $103.74, up 0.34 cents from the previous session, while Brent crude, the global benchmark, traded down 0.13 cents to $107.33.

Crude oil prices account for about 70 percent of the price U.S. consumers pay for a gallon of gasoline. AAA reported a national average price for a gallon of regular unleaded gasoline of $3.64, up nearly 6 cents from last week.

Related Article: U.S. Oil Boom Makes Gas Cheaper, but not by Much

Michael Green, a spokesman for AAA, told Oilprice the national average price for Monday was the highest reported since July 27 because of domestic supply and demand issues. The U.S. Energy Information Administration reported gasoline stocks declined to 210 million barrels, the lowest since November. The onset of warmer temperatures after a long winter season, meanwhile, meant more people were taking to the roads.

"As a result, drivers now are paying more than a year ago with the national average 11 cents per gallon more expensive than last year," Green said.

Last week's increase was the largest since February and, while overseas issues were influencing global energy prices, the end of a period of seasonal refinery maintenance at home didn't mean much for U.S. consumers looking to cure their cabin fever.

Green said most producers have got rid of their winter blend of gasoline stocks in order to make room for the summer blend, which is more expensive to produce. This has resulted in a depletion of gasoline supplies in some parts of the country.  California drivers paid more than $4 per gallon Monday, while Illinois drivers saw their state average go above the $3.90 mark.

Related Article: Spring Fever Could Lead to Increase in Gas Demand

"Unfortunately for drivers, supplies have dropped more precipitously than expected, which is sending prices higher," said Green.

EIA later this week is expected to release its petroleum statistics, which could push gasoline prices even higher if supplies are shown to be limited. If the supply situation stabilizes, prices at the pump could start to ease, though Green warned international factors may still come into play.

"The U.S. petroleum market is never fully isolated from events overseas," he said. "Crude oil is a globally traded commodity, which means that U.S. consumers often pay more at the pumps because of international political instability."

By Daniel J. Graeber of Oilprice.com

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Leave a comment
  • Steve Barnes on April 15 2014 said:
    Just more lies to make the fat cats fatter. The world is awash in oil and the world economy still sucks,but the speculator swine are also awash in basically free money from the Fed that the rest of us have no access to,that they use to buy up contracts and then create phony crises to drive up the price and they make millions off our backs.I can't decide which would be more appropriate for them,hangin'or firin'squad.
  • Mike Mahoney on April 15 2014 said:
    Overseas instability has been a factor in oil prices for a hundred years. One would think that the market would have a permanent, built in premium by now. Hard to believe some of the reasoning for pricing. When China was going gang busters the reasoning was all supply and demand. Now China is slowing as is much of the world, supplies are really no more endangered than ever. Yet a country that never made headlines in oil pricing before is now THE reason.
    Please quit playing us.
  • The Truth on April 19 2014 said:
    US citizens need to stand up and protest this! No MORE GAMES! NO MORE LIES! Gas prices are killing everything! Gas shouldn't even be that high. "Oh sorry drivers gas prices are high" Lots of people now have to choose to eat, pay rent, or buy gas to get to work. We are TIRED! No more! Riot! Protest! NO MORE!!
  • Richard Wright on April 20 2014 said:
    Americans have yet to hear a reasonable, understandable reason for the high price of gasoline. The reasons we hear make no sense to the common working man's mind. Why don't people who are in authority care that rising fuel prices always cause inflation. This country runs primarily on diesel fuel and when prices soar, transportation prices soar resulting in higher prices for goods.
    This is probably the most frustrating thing we face as consumers. Gas pump prices fluctuating faster than airfare is idiotic. Gas prices being controlled by speculators is stupid and this fact should be recognized by intelligent people who can do something
  • Buck Bush on April 20 2014 said:
    Mike Green must be getting the green, from exxon,bp, shell and others.

    We have more oil than we have ever had. Can you say, AAA, an Green, are

    bought off.

    We are low on oil, what a joke.
  • JL on April 21 2014 said:
    Nothing like more lies and market manipulation by the Oil majors to spike the prices up. Forget that pipeline. We could be swimming in oil and these idiots would get the prices up to sky high levels anyway. Forget it. Used to be for that pipeline until I realized it will never bring prices down. Nothing will until we eliminate the problem: Oil/gas has no competition. What this market desperately needs is a alternative, be it more electric vehicles, hydrogen, NG or combinations of all and more. We absolutely need to kill this beast that keeps killing OUR economy!! Our paid off Reps won't do it, so we must. INSIST that the auto co's make more electric vehicles with much better range. INSIST that more hydrogen and ng powered vehicles come to market. INSIST that we MUST have viable alternatives to gasoline!!!! THIS MUST CHANGE!!!
  • Mike S. on April 26 2014 said:
    We will never get his beast under control with our current government. They are all part of it and could stop it anytime they want to. I used to think we had the best of the best for a government but now I am starting to wonder who is really in charge?
  • Chris N on May 06 2014 said:
    It's always something. Big oil has a load of excuses to keep oil up. Big supply? wildfires drive prices up. Wildfires under control? Hurricane price drive up time. Out of hurricane season? Changing from winter to summer to winter blends etc. What bullshit. Buy alternative energy source vehicles and tell Big Oil to shove it.
  • Bob on August 20 2014 said:
    We are constantly being told that we need to fracture more and dig more wells to keep America independent from foreign oil. Then they sell it all to other countries and raise our prices. We need to nationalize the oil industry in the United States. The fat cats and politicians just keep stealing from us

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