Gas prices are expected to rise in the near future
COLORADO SPRINGS, Colo. (KRDO) – It’s hard to ignore: Gas prices are on the rise in Colorado and across the country, and those prices may not have peaked.
“If production levels stay roughly where they are, I think you’ll see the price continue to rise,” says Donnie Wisenbaker, CEO of Pike Peak Energy in Colorado Springs.
Around the same time last year, gasoline cost less than two dollars a gallon, on average about $ 1.61 in Colorado Springs according to gasbuddy.com. Now, in June 2021, prices have jumped all the way to $ 3.09.
Wisenbaker says an increase is common during the summer months, saying, “From Memorial Day to Labor Day, you usually always see gas prices a bit higher.”
However, there are other unique factors that have caused this recent increase, with oil prices playing the most important role. Wisenbaker says, “As oil prices go up, you see a correlation between that and gas prices. “
The price of crude oil on West Texas Intermediate at On May 28, 2021, was $ 66.32 per barrel. Last May, the price of oil fell to $ 19.78 per barrel.
Another contributing factor is oil production. The pandemic has prompted oil companies to cut production, with many people staying at home and not traveling. Wisenbaker says that since then production has started to ramp up, but refineries are still cautious and don’t want to end up with a lot of product on hand. From there, he says, it becomes an economy of supply and demand.
“You reduce production a bit, you will see it at the pump because there is less gas to circulate”, explains Wisenbaker.
Wisenbaker also says the February freeze in Texas and the cyberattack on the Colonial Pipeline played a small role in the increase, but that’s mainly because it caused people to panic to buy and store gas, which , according to him, was not necessary. “It’s still toilet paper,” Wisenbaker. “There is a lot of fuel, otherwise we had excess fuel. ”
Regarding claims that President Joe Biden is another reason for the increase, Wisenbaker said, “In my experience, presidents don’t really have much influence over what happens.”
Wisenbaker added that the president’s policies could impact future prices, but nothing regarding day-to-day impacts.