As cars sat and driveways and airplanes sat on runways, the cost of energy dropped significantly during the COVID-19 pandemic. Now, as the economy reopens and demand for oil is back up, supply just isn’t keeping up.
This is why US oil prices have skyrocketed, according to CNN, up $120 since crashing to negative $40 a barrel in April 2020. In fact, on Monday, United States oil prices were $80 a barrel for the first time in almost seven years.
In Massachusetts, gas prices are averaging $3.17 per gallon right now, according to GasBuddy, up $1.08 from last year and up 9.7 cents from last month.
Nationally, the average price for gasoline reached a seven-year high of $3.27 a gallon on Monday, up by 7 cents in the last week, according to AAA. In fact, gas prices have nearly doubled since reaching a low of $1.77 in April 2020, CNN reported. Gas prices usually take it easy this time of year.
While the impact of these increasing prices may be significant on Americans, they may increase even more due to the global energy crises.
Power plants and factories in Europe and Asia may turn to cheaper fuel sources, like crude oil for electricity, according to CNN, as natural gas prices continue to skyrocket.
While demand is strong everywhere, oil suppliers are not meeting it. U.S. oil production has been slow rebounding from the pandemic, even as prices are increasing. CNN reported that US oil companies are more focused on returning cash to shareholders who have lost money in the last 10 years than they are in oversupplying the market.
The White House is calling on OPEC to ramp up production, but they have only increased output gradually since early 2020, according to CNN.
“They have always been the swing producer,” Kpler’s Smith said, according to the new site, “but my gosh they certainly hold the power right now.”
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