Since Monday, the national average for a gallon of regular gasoline has increased by 11 cents to $4.97, according to AAA. New data from the Energy Information Administration indicates that total domestic gasoline stocks decreased by 800,000 bbl (barrels) to 218.2 million bbl last week. All this while gasoline demand grew from 8.98 barrels per day to 9.2 million barrels per day as drivers fuel up to hit the road for this summer.
According to AAA, the difference between less supply and increased demand is contributing to the rising prices at the pump, coupled with the increasing crude oil prices, which means that gasoline will continue to increase.
Larry Persily, Federal Coordinator with Alaska Natural Gas Transportation Projects, explains to KSRM’s “Sound Off” how and what affects overall oil prices:
“The market right now is really nervous where the next oil is going to come from but most of what we read about price spurts today, I don’t want to say barrels, but most of that money is investors. It’s not people who are actually looking to buy oil right at the refinery, it’s the investors who think prices are going to go up. It’s $120 today. It’s going to be $125 tomorrow. I can buy this $121 and still make money and get out. It’s kind of like investing in the stock market, but it’s just betting on the future price of oil and that’s driving it up.”
Persily adds:
“Also, a lot of refineries have closed in the United States in the last several years. You have two on the west coast, Marathon and Phillips 66 each have closed one in California that are converting to biofuels. We haven’t had a new refinery built in the U.S. in decades. That refinery shortage is also affecting prices.”
Alaska’s statewide average going into this weekend is $5.51/gallon for regular gasoline. Locally in the Kenai/Soldotna area, gasoline prices are averaging at $5.59/gallon for regular.