JAMESTOWN – What’s causing gas prices to skyrocket? One expert points to those dirt-cheap gas prices we saw at the height of the pandemic, happening as most of us stayed home and roads sat nearly empty.
“In some case, the $1.38 gallon and that’s the low price that then caused the oil industry to start shutting down production, which is why oil companies let tens of thousands of workers go why they shut down so much production,” explained Patrick De Haan, Head of Petroleum Analysis with GasBuddy.com.
Energy demand is back but supply has not kept up, and that’s driving up oil prices leading to pain at the pump.
According to AAA on Wednesday the national average price for gasoline hit a seven-year high of $3.29 a gallon. That’s up 7 cents in the past week alone.
The hike comes at a time when more people are hitting the road once again with many returning to in-person work.
“Until those supply bottlenecks and oil production goes up to match the increase in demand, we could be stuck with oil prices that are at or near those seven-year highs,” said De Haan.
Experts say brace for those prices to continue to climb and warn relief is still months away.
“The supply side of these markets will kick into the gear, meet the demand and prices will begin to moderate, you know, it’s not going to be next month next quarter, but I think by this time next year will be in a better place,” explained Mark Zandi, Chief Economist with Moody’s Analytics.