(RepublicanDaily.org) – “I think the inflation news has been overall excellent,” Treasury Secretary Janet Yellen said in a recent interview on CNN’s “OutFront”, pointing out that while gas prices are on the rise, the costs Americans fork out at the pump are significantly less “than they were at their peak last year.”
Still, pump prices are at their highest this year – and that’s without the initial concern over the war in Ukraine that sparked all-time highs in gas prices last year. The average price of fuel at the pump is $3.85, up 30 cents from last month, and only marginally lower than average prices at the same time last month, which was $3.94, according to data from AAA. In California, the state with the highest gas prices, the average is much higher at $5.17 a gallon.
And that’s despite an increase in oil production from U.S. oil companies this year.
Experts point to a number of factors that have contributed to the fuel spikes of late, which include a surge in demand over the summer, as well as heat-related outages at petroleum refining plants here in the U.S. Fuel companies are also keeping inventories low.
OPEC+, the association of major fuel producing countries in the world, also cut down oil supplies, continuing a trend they began last year. Saudi Arabia recently announced that it would cut production by 1 million barrels of oil at least for the months of July, August and September, while Russia said that it would also bring down production by half a million barrels a day for August.
As for U.S. oil producers, Naser Ameen, the head of crude oil forecasting at the Energy Information Administration, said that U.S. oil production can’t be expected to replace the cuts in fuel production from OPEC+ countries.
According to Ameen, the domestic oil producers are more balance-sheet driven and are a “bunch of independent producers making their own independent decisions.”
U.S. oil production is expected to produce an average of up to 12.8 million barrels daily this year, according to estimates released by the U.S. Energy Information Administration. For comparison, the U.S. produced 12.2 million barrels a day in 2019.
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