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Expert breaks down gas price increases

Gas Prices South Dakota
Posted at 2:56 PM, Oct 27, 2021

Nationally, the price of gas has gone up 27 days in a row. On average, it's costing Americans $3.38 per gallon, according to AAA.

Some have blamed government leaders like President Joe Biden, but experts say it goes beyond them.

“Though they may try to take credit or blame for the state of oil, a president really can't control a global commodity,” said Patrick De Haan, Head of Petroleum Analysis at GasBuddy.

Globally, De Haan says there's more demand for oil and gas than there is supply.

Oil companies haven't raised production levels back to pre-COVID-19. Some of that has to do with labor challenges and some of it has to do with attitude.

“It does seem like this is getting more political, that oil producers are reluctant to increase production, given the fact that they feel attacked by many countries on the move away from oil,” said De Haan.

Worldwide, fuel shortages are impacting the U.S. China's reduced coal supply has them buying up every energy commodity. Europe's natural gas shortage has some U.S. power plants adding to demand by switching from natural gas to oil.

Another political assumption is that President Joe Biden's canceling of the Keystone Pipeline and limiting future drilling are driving up prices now.

“Those impacts are not to be felt yet for several years. Canceling a pipeline that was never completed, a never-relied-on pipeline that was built for future capacity being shut down really is irrelevant at this time,” said De Haan.

Even with OPEC's recent increase in production, De Haan says it will take at least a few months to catch up to meet demand, which means higher prices will stick around through the holidays.

He said U.S. consumers are spending close to $500 million more on gasoline every day compared to a year ago.