What’s causing gas prices to soar, and will it continue?

Money

EAST PROVIDENCE, R.I. (WPRI) — Gas prices are on the rise nationwide, and in Rhode Island, they’re the highest they’ve been in seven years.

Lloyd Albert, senior vice president of AAA Northeast, tells 12 News there are two main factors: more people on the road compared to this time last year, and the cost of crude oil.

“The price of crude oil has shot up from about $60 a barrel back in August, now it’s about $82 to $83 a barrel this afternoon,” he said.

Another factor, according to Albert, is that OPEC+ (Organization of the Petroleum Exporting Countries) has held firm on production cuts, causing less oil to be in the marketplace. However, Albert said there’s no shortage in the United States at this time.

The country is using roughly 610,000 more barrels of oil per day compared to 2020, according to Albert. He said prices could go up even more as we approach the holiday season.

“Our storage of crude oil in this country is down about 13% versus the same level last year,” he explained.

Albert added that even though prices could increase in the short-term, he believes there will be an “equilibrium” where the cost of crude oil drops below $60 a barrel as we get closer to winter and spring.

Another factor to take into consideration, Albert said, is that with the colder months approaching, home heating oil will be in necessity. He said it’s unclear at this time what kind of impact the higher demand will have on the already limited amount of crude oil.

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