Gas was the lowest since it had been in June of 2004 on mid-July reports the Energy Information. There is a lower demand for fuel with the soft economy and fuel efficiency is better. Gas prices are going up because of the lower demand.
Drop in gasoline demand
Gas and oil demand dropped throughout 2008. Individuals paid $ 4 and more for gas because of the drop. There were more fuel efficient and hybrid automobile created during this time. By late 2009, the trend had reversed, though interest in fuel efficient cars continues to rise. In the winter, more oil is needed for heating so the demand for oil is more than the demand for gas.
Production of U.S. oil
There is a strong connection between U.S. oil production and gas prices. About 28 percent of the daily requirement of oil in the United States is met domestically, though the shutdown of offshore oil production is starting to trickle down. Since there is less production of oil in the U.S., more imports have to be brought to the country.
Summer driving
The uptick in demand for oil over the last few weeks has been attributed, partially, to the summer driving system. The American Automobile Association estimates that a growing number of individuals will be choosing to drive further this summer.
U.S. fuel comparisons
The U.S. uses probably the most fuel. China is the second-largest consumer of gasoline, but demand in China is easily rising to levels that could make it first. In numerous small European countries where fuel-efficient automobiles are becoming more popular, fuel taxes make the price of a gallon of gasoline as high as $ 8 per gallon. Since supply is going down when demand goes up, many individuals could have no other choice then to switch to fuel efficient vehicles.
