The average price of a gallon of gas went up 13 cents this past week. Iowa Department of Agriculture analyst, Harold Hommes, says the increase is a little puzzling.
“We are seeing kind of a bit of a dip in inventories. A little bit unexpected because crude oil production is up at the moment…as of last week U.S. crude oil production hit 7.5 million barrels a day, and we haven’t seen that level since ’92,” Hommes says. Hommes says people seem to be traveling more recently as witnessed by the use of 9.3 million barrels of oil a day last week.
Hommes says the typical oil usage a few weeks ago was at 8.3, to 8.4 million barrels a day. “So we’ve bumped by nearly one million barrels a day just because of summer driving. Travel and our use of gasoline is certainly up,” Hommes says. He says the increased demand has helped keep the price up.
He says the output of gasoline is at a two-year high and that should push prices down, but he says the demand has gone higher and offset some of the potential downward pressure. Hommes believes the gas prices won’t continue going up that much more.
“Well if the crude production numbers stay high, I think that bodes very well that this is going to be a mid-summer spike,” Hommes says. The average price for a gallon of gas in Iowa was $3.58 a gallon, while the average price nationwide was eight cents higher.