Gas prices are going up significantly. Here's why.
A surprise decision last week from the Organization of Petroleum Exporting Countries, along with other oil producers including Russia, last week has started to greatly affect fuel prices.
In Springfield, regular grade gas last week was on average $3.17 per gallon. The average as of Thursday was up six cents, to $3.23 per gallon.
"OPEC+ announced plans to cut global crude oil output by one million barrels per day through 2023. The move, which is set to begin in about three weeks, caused crude oil prices to spike back above $80 per barrel," wrote Nick Chabarria, a spokesperson for AAA Missouri, noting this had a ripple effect on consumer fuel prices.
Oil barrel prices peaked in June last year at $120, Chabarria wrote, which led to a record-breaking $4.57 per gallon average for gasoline in Springfield, based on gas price information compiled by AAA. Diesel was above $5.
"Current crude prices are still a significant ways away from that figure. Unless we see a substantial increase in crude prices, it’s unlikely right now that we reach the record highs we saw in 2022," he wrote.
AAA expects much like last year people will adjust their daily driving habits to avoid filling up as often. There is no expectation this will change summer travel and vacation planning, though.
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"Looking back at 2022 when we saw record setting gas prices during the peak summer travel season, AAA Travel still saw travel metrics increase year-over-year," Chabarria wrote. "... Barring a global economic slowdown, drivers can expect prices to remain elevated as the summer driving (season) approaches."
AAA does have a few tips on how to drive efficiently. The main one is driving posted speed limits. It also is recommended to not do “jackrabbit” starts or hard accelerations.
Minimize use of air conditioning and use cruise control on highways, except in rainy or slick conditions. Ensure tires are inflated properly. Adjust your speed to "time" traffic lights as this reduces repeated braking and acceleration that consume additional fuel.
When approaching intersections or traffic lights also take your foot off the gas earlier so as to coast to a slower speed before applying brakes.
Missouri had the sixth lowest average price per gallon for regular unleaded at $3.31 on Thursday, AAA said in a news release. This still is 13 cents more than last week, but is 34 cents less than the same time last year. The national average Thursday was $3.64, which is nine cents more than last week, but 44 cents less than last year.
"The upward trend is a good reminder to make sure your vehicle’s fuel economy is at its best by performing regular maintenance and practicing safe driving habits," Chabarria said in the separate release.
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The average price all fuel grades in the U.S. has hovered between $3.30 and $3.56 since the start of the year, according to the U.S. Energy Information Administration, and has generally increased from the lower to higher end of the scale the last few months. Last week the average price was $3.60 per gallon. At the start of this week, the average of all fuel grades was $3.70.
Fuel demand went down last week, AAA said, based on EIA data.
"Gas demand decreased from 9.3 to 8.94 million barrels per day last week. Meanwhile, total domestic gasoline stocks dropped slightly by 400,000 barrels of crude oil to 222.2 million," AAA said in a news release Thursday. "Lower demand would typically push pump prices down. Instead, elevated oil prices have pushed them higher.
"If oil prices continue to rise, pump prices will follow suit."
Charles Dunlap covers local government, community stories and other general subjects for the Tribune. You can reach him at cdunlap@columbiatribune.com.
This article originally appeared on Springfield News-Leader: Crude oil output is going down, increasing gas pump prices
