How much does gas cost in different states and why are prices so high right now?

Oil production is down while demand is surging

John Bowden
Tuesday 23 November 2021 17:28
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Americans around the country are facing higher gas prices and the potential for higher heating costs this winter while a dispute over oil production plays out on the world stage.

The issue has become a top matter of concern for President Joe Biden and his administration; the former complained to leaders of other Group of 20 (G20) nations as well as representatives of the Organization of the Petroleum Exporting Countries (OPEC) in recent weeks, and has urged top oil producing countries to increase production before the winter season.

The national gas price average currently sits at about $3.40 (£2.54) according to AAA, which is $1.29 (£0.96) more than the average price in November 2020. States on the west coast and northeastern parts of the US are being hit the hardest; every state west of Montana has a gas price average higher than $3.50 (£2.62) a gallon, with the highest in Nevada ($3.97/£2.97), California ($4.70/£3.91), and Hawaii ($4.35/£3.25). In the nation’s capital, the average is $3.57 (£2.67) a gallon.

Prices are lowest in the central and southern US, especially in Oklahoma which is the only state with an average price lower than $3.00 a gallon ($2.97/£2.22).

The rise in value of oil by the barrel is attributed at least in part to the historic lows oil prices reached last year, which drove some US companies out of business and shuttered some wells that were previously in use.

Lower US production which has not recovered quickly as demand for oil and higher prices returned is coupled with a refusal by OPEC to raise production. The coalition of nations reiterated its refusal to increase levels earlier this month beyond a previously announced monthly hike of several hundred thousand barrels per day.

“The decision was made previously to increase production by 400,000 [barrels per day] every month, and I underscore every month, until the end of 2022. Today the decision was reiterated to maintain current parameters which were decided on earlier,” said Russia’s energy minister in a statement.

Oil prices reached $80 (£59.77) a barrel early last month, the highest price on record since 2014, and hovered at that level stubbornly for weeks before finally falling back into the 70s. Today, the price is roughly $76 (£56.78) per barrel, but analysts say that price could go up again soon as winter demand picks up.

“[U]ntil global oil production ramps back up to pre-pandemic levels, this recent dip in the price of crude may only be temporary,” said a spokesperson for AAA.

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