Gas prices rose to the highest levels since 2014, amid increased demand and concerns about supply.
According to AAA, the national average for a gallon of regular unleaded gasoline rose two cents to $3.204, the highest level it has been since October 2014, according to USA Today. California’s prices are the highest, at an average of $4.414 per gallon. Mississippi has the lowest prices, averaging $2.829 per gallon.
Gas prices have also risen more than a full dollar since last year, from $2.186 in October 2020.
The highest recorded national average was $4.114, in July of 2008.
The increase in prices at the pump is likely due to the substantial increase in oil prices. Crude oil prices have spiked to more than $80 per barrel, according to Bloomberg.
A report by the Energy Information Administration (EIA), noted that total domestic gasoline stocks in the U.S. increased slightly, from 221.6 million barrels last week to 221.8 million barrels this week. Gasoline production is currently at around 9.7 million barrels per day, up a little more than 800,000 barrels per day from the same time last year. But demand has also accelerated from around 9.4 million barrels per day, up from about 8.5 million barrels per day in September 2020 and from 8.9 million just last week. According to EIA data cited by AAA, oil production was below pre-COVID levels, during the same time period in 2019.
“Global economic uncertainty and supply chain concerns caused by the lingering COVID-19 pandemic could be playing a role in keeping crude oil prices elevated,” said AAA spokesperson Andrew Gross in a statement. “But, there may be some relief on the horizon due to the news that OPEC and its allies might ramp up production increases faster than previously agreed.”
As demand for crude oil decreased because of COVID-19 travel restrictions, The Organization of Petroleum Exporting Countries (OPEC) slashed its oil production but has since begun to ramp up production as economic activity and travel returns to normal.
OPEC previously decided on a gradual increase in production of about 400,000 barrels of oil per month until April 2022. Saudi Arabia, the de facto head of the organization, has increased its output to near pre-COVID levels, to about 9.8 million barrels of oil per day, according to Bloomberg.
There was hope from some corners that OPEC would increase its output by a larger figure. Bloomberg reported that some delegates were anticipating a higher than expected production increase, but the organization decided to continue its gradual uptick at a meeting Monday.
The U.S. Imports about 989,000 barrels per day, about 10 percent of its total oil production.