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01/19/2022

Oil Prices Are Rising, Pushing Prices at the Pump Higher

Drivers are likely to pay more based on increased demand paired with lagging crude oil production.
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Rising gas prices

WASHINGTON, D.C. — Rising oil prices pushed the national average up 1 cent to $3.31 per gallon as crude oil rose above $80 per barrel. This is primarily driven by widespread perception that the COVID-19 omicron variant may soon peak, resulting in increased prices due to a spike in oil demand paired with lagging crude oil production.

As the price of oil accounts for approximately half of what consumers pay for at the pump, drivers are likely to see higher gasoline costs, reported AAA.

"In the past few weeks, we have seen the price for a barrel of oil slowly work its way from the mid-$60s to the low $80s," said Andrew Gross, AAA spokesperson. "And the primary reason is global economic optimism, whether well-founded or not, that the worst of COVID may soon be behind us."

New data from the Energy Information Administration shows that total domestic gasoline stocks increased by 7.9 million barrels to 240.7 million barrels last week. At the same time, gasoline demand decreased from 8.17 million barrels per day to 7.91 million barrels per day as a result of winter weather and the omicron variant. Pump prices typically decline due to lower gas demand and an increase in total stocks, but rising crude oil prices have helped to elevate pump prices, according to AAA. As oil prices continue to rise above $80 per barrel, pump prices will likely follow.

The national average as of Jan. 18 is $3.31, up 1 cent more than a month ago and 93 cents more than a year ago.

The top 10 largest weekly increases in the United States occurred in Iowa (+6 cents), Minnesota (+6 cents), North Carolina (+5 cents), Missouri (+4 cents), North Dakota (+4 cents), Texas (+4 cents), Washington, D.C. (+4 cents), Wisconsin (+4 cents), Oklahoma (+3 cents), and Kansas (+3 cents).

The top 10 most expensive markets are California (an average of $4.65 per gallon), Hawaii ($4.32), Washington ($3.95), Oregon ($3.91), Nevada ($3.81), Alaska ($3.76), Arizona ($3.58), Idaho ($3.54), Washington, D.C. ($3.51), and Pennsylvania ($3.51).