WASHINGTON (WDVM) — One year ago, gasoline prices dropped to multi-year lows as the price of crude oil per barrel sunk into the negatives. As more people head back to work and begin to travel, gas prices continue to climb, causing many to feel “pain at the pump.”
John Townsend, spokesperson for AAA mid-Atlantic, said it all depends on demand.
“Well, one of the reasons prices are increasing is because demand is increasing. So it goes back to that ancient law what is often called ‘the invisible hand of the economy’s supply and demand. So when demand goes up, prices can go up,” explained Townsend.
Townsend said even though driving has returned to at least 80% of pre-pandemic levels, the Organization of the Petroleum Exporting Countries (OPEC) is still cutting production of crude oil, continuing to scale back through at least the end of April.
“Right now, what OPEC is doing is keeping the supply down in order to keep the price up,” said Townsend.
According to Forbes, the Biden/Harris administration can take some of the blame as it’s working to decrease U.S. oil production, causing the global market to tighten which has led to the increase in crude prices, but Townsend said it’s not just about who’s in the White House.
“The price of gasoline is determined by global factors, not by domestic factors,” stated Townsend.
In the Washington-metro area, drivers are paying around a dollar more per gallon than they were in April of 2020 as crude oil prices per barrel climb above $60.
OPEC is meeting on Wednesday and is expected to discuss an increase in production, which could lower prices at the pump. Even with the increase in barrels per day, gas prices could continue to rise with summer travel nearby.