What’s up with the rising cost of gas?
AAA and GasBuddy are blaming it on the extreme cold weather shutting down oil refineries.
The average gas price in Champaign-Urbana was $2.83 as of Friday, according to AAA, up from $2.73 a week ago and $2.44 a month ago.
“There are two biggest factors driving gas prices: crude oil prices and refinery operations,” AAA spokeswoman Molly Hart said. “More than 2 dozen refineries from Texas to Oklahoma and even to Tennessee closed due to the below-freezing weather taking about 5 million (barrels per day) offline. With that much crude production not in action, supply tightens and prices increase.”
She said crude is expensive “because there is a world demand for it. Also, the market is very optimistic about vaccinations and what that could mean for the return of travel, which translates to higher crude.”
Patrick De Haan, head of Petroleum Analysis for GasBuddy, said about 20 percent of America’s refining capacity was shut down during the extreme cold weather.
“That’s huge and rivals a hurricane in Texas,” he said.
And don’t expect prices to drop as quickly as they rose.
“I wouldn’t expect prices to drop much once this is done as demand continues to recover as states reopen and as supply of crude oil continues to trail demand,” De Haan said.
“Many refineries have restarted operations, but it may take a few weeks before U.S. refineries are back to max operations,” Hart said. “Gas prices have been increasing for weeks, and despite low demand, pump prices are rising. … We may see the year’s highest prices in spring with a decrease come early summer.”