Gas prices are up as demand recovers, oil prices rise
Prices at the gas pump are increasing, an unusual trend for this time of the year, due to rising crude oil prices and gasoline demand starting to recover, according to industry officials.
“In the last 10 months, (oil) prices have been really beaten up, largely due to the coronavirus, which limited overall gasoline demand,” said Patrick De Haan, head of petroleum analysis at Boston-based GasBuddy. “But In the last couple of months, oil prices have heated up on optimism that the (COVID-19) vaccines would allow Americans to get back to some level of normal.”
De Haan said crude oil prices are now at about $53 a barrel, the highest they’ve been in a year, since before the pandemic.
“The fact that oil prices are now advancing is behind the rise that we’re seeing across Alabama and much of the country really,” he said.
The statewide average price for regular-grade gasoline has increased 21 cents a gallon in the past month, said AAA-Alabama spokesman Clay Ingram.
“That’s unusual for this time of the year,” Ingram said. “We usually reach the rock-bottom low at the end of January,” then start seeing an increase in gas prices in February, he said.
Ingram said that prices were “so low in 2020, we really have nowhere to go but up.”
Statewide, the gas price averaged $2.18 a gallon on Tuesday, up from $2.10 a week ago and $1.97 a month ago, and down from $2.32 a year ago, according to AAA data.
Ingram said there’s growing optimism that, with vaccines becoming available, it will be safer to travel this year.
“Gasoline demand has already recovered to 90% or so of where it was before the pandemic,” De Haan said. “So really it’s like oil prices have healed from COVID so to speak,” although driving demand hasn’t fully recovered yet.
“The only light at the end of the tunnel is that the average price in Alabama is still about 13 cents lower than last year,” De Haan said.
