Gas prices remain high despite drop in price of crude oil
PORTLAND, Ore. (KPTV) - While gas prices in Oregon are slowly creeping downward, the decrease is not nearly at the same pace that prices increased in early March.
Although crude oil prices are down significantly from their March peak, prices at the pump are still well over a dollar more than they were at this time last year. The national average gas price currently sits at $4.07 per gallon, but the average price in Oregon is $4.63.
Although President Biden has warned oil companies against price gouging and encouraged them to process more crude, Yan Liang, Endowed Chair and Professor of Economics at Willamette University, said producers can’t easily or quickly ramp up production, nor are they necessarily incentivized to do so.
“They also have their own calculations. If prices are because of the lack of supply, they can take advantage of that,” said Liang. “They are able to increase production, but then what you hear from some of the CEOs of these oil companies, they basically said there’s no interest in drastically increasing the production of oil.”
And while President Biden has authorized the release of a million barrels of oil per day from the country’s strategic reserves, that really only amounts to just a few drops in the proverbial bucket.
“Let’s put it in perspective,” said Liang. “That is only about 1% of the global oil supply and about 5% of the US’ daily consumption.”
The US Energy Information Administration predicts oil prices to remain high throughout 2022, and not falling below 100 dollars a barrel until 2023.
Copyright 2022 KPTV-KPDX. All rights reserved.