Fuel prices have risen over the past month, with the average price for ordinary lead-free 37 cents in the Las Vegas metro area.
Locally, the average AAA price rose from $ 2.84 a month ago to $ 3.21 from Monday.
The Silver State’s average price for gas has also risen by 37 cents in the past month, while the national average has risen by 38 cents according to AAA data. The price at the pump has risen by 72 cents since November 20.
“This increase is not just isolated in the West,” said Sergio Avila, AAA Nevada spokesman. “This is something that is happening across the country. Each state average has climbed by double digits since February, leading to one in 10 filling stations with pump prices of $ 3 per liter or more. ”
Industry analyst Trilby Lundberg of the Lundberg Survey said the price increase was due to higher crude oil costs, the persistent effect of power outages that caused several refineries in Texas to stop or reduce operations last month, and rising credit prices for a renewable fuel.
Patrick De Haan, chief petroleum analyst at GasBuddy.com, said it came down to supply and demand.
“In the last few months, when we started to see improvement with the pandemic, Americans have places to go,” De Haan said. “The demand for petrol is now just below where it was before the pre-pandemic.”
Increasing demand
De Haan attributes the increase in motorists nationwide to the continued explosion of vaccines, which eases coronavirus-related restrictions and puts people back to work.
Despite the increased demand, oil producers who reduce production during the pandemic have yet to pick up, De Haan said.
“That is why prices have increased since November last year,” said De Haan. “Everyone wants to point out that the election was in early November, but also the fact that the vaccine was coming. It had an important promise to bring the demand for oil back to where it would be otherwise. ‘
De Haan said the increase in the gas price was not related to the acceptance of President Joe Biden, as many online speculate.
“Apparently there are thousands of petroleum analysts out there deciding what drives up prices,” De Haan said. ‘Although the demand for petrol has a wide recovery until just under a year ago, many other fuels have not had it – jet fuel is one of them. The fact that before COVID there was no shortage of pipeline capacity at all, there is still no shortage of pipeline capacity as the volumes are still lower. ‘
Biden’s decision to discontinue Keystone Pipeline work does not currently affect gas prices, De Haan said.
“If you take a pipeline that has been used for years and that you count on, then you would have a problem,” he said. ‘But just removing a non-functioning pipeline from the equation is not something that can significantly increase prices. It may be possible in the future, if there is enough crude oil production, that we do need the pipeline capacity, but this will not take years. ”
Soon relief soon
Another misconception is that Biden banned hydraulic fracturing, also known as hydrofracking, which has been widely cited as one of the reasons for the rising gas prices. De Haan said this is untrue, as Biden is placing a 60-day moratorium on new wells on federal soil, which went into effect in January.
He noted that oil companies produce about 10 million barrels of oil per day, down from the 13 million barrels per day they produced a year ago.
“Until we reach the pre-pandemic level of 13 million barrels per day again, there is no oil company that wants to put a new drill in the ground, whether it is on federal or private land,” he said. .
De Haan expects prices to rise until oil producers increase production, which he will not see happening any time soon.
Avila agreed and noted that the price of crude oil is two years high. The U.S. crude oil benchmark rose 57 cents to $ 66.18 a barrel in electronic trading on the New York Mercantile Exchange on Monday.
“Crude oil prices are about 50 percent of the price drivers pay on the pump,” Avila said. “With a record low utilization of refineries, the supply of gasoline is increasing, demand is increasing modestly due to weakening constraints and crude prices are increasing, cheap prices are in the rearview mirror for the immediate future.”
Contact Mick Akers at [email protected] or 702-387-2920. Follow @mickakers on Twitter. The Associated Press contributed to this report.