Gas prices are on the way up and could break the $3 threshold in the immediate Capital District, according to the head petroleum analysis at GasBuddy, an online company that tracks fuel prices across the country.
A number of issues are contributing to the recent spike in gas prices, said Patrick DeHaan, including production cuts by OPEC, the fact domestic inventories are down by 77 million barrels compared to last year and that there are a record number of exports from the U.S. Exporting oil was legalized in 2016, President Barack Obama’s last year in office, he added.
A gallon of regular in the Capital District is going for an average of $2.678 as of Thursday, Feb. 1, according to GasBuddy, which is about .30 cents higher than last year and .13 cents higher than a month ago.
And, DeHaan said, every indication is prices will continue to climb because of the factors mentioned above coupled with others like low oil production in Venezuela and high Chinese demand.
“In addition, once refinery maintenance season begins en masse by mid-March, gasoline production ability will be diminished, sending prices higher,” he said. “To make things worse yet, the transition to summer gasoline will constrain supply further and eventually send prices up at a faster pace than what we’re currently seeing. Albany’s average price may reach deep in to $2 territory and there are also chances it might temporarily reach $3 per gallon.”
Nationwide, a gallon of regular is going for an average of $2.60, which is .33 cents higher than a year ago and about .12 cents more than a month ago.
The spike comes at a time when the U.S. just eclipsed the production of 10 million barrels of oil per day, the highest level since 1970 and close to an all-time record, DeHaan said.
“U.S. production is nearing record levels, but the rise in U.S. production can’t come close to offsetting OPEC’s production cuts, which have seen over 100 percent compliance,” he said. “The U.S. went from producing five to six million barrels a decade ago to nearly 10 million today. However, we still import the remaining 10 million barrels per day that we consume.”
GasBuddy was founded in 2000, and now more than 70 million consumers use the website and/or app to find the low gas prices.