Drivers face high gas prices despite US oil boom
NEW YORK — The United States is increasing its oil production faster than ever, and American drivers are guzzling less gas. But you would never know it from the prices at the pump.
The national average price of gasoline is $3.69 per gallon and is forecast to creep higher, possibly approaching $4 by May.
‘‘I just don’t get it,’’ said Steve Laffoon, a mental health worker, who paid $3.59 per gallon in St. Louis.
US oil output rose 14 percent to 6.5 million barrels per day last year — a record increase. And by 2020, the nation is forecast to overtake Saudi Arabia as the world’s largest crude oil producer. At the same time, US gasoline demand has fallen to 8.7 million barrels a day, its lowest level since 2001, as people switch to more fuel-efficient cars.
So is the high price of gas a sign markets are not working properly?
Not at all, experts say. The law of supply and demand is working, just not how US drivers would want.
US drivers are competing with drivers globally for every gallon. As the developing economies of Asia and Latin America expand, their consumption rises, which puts pressure on fuel supplies and prices everywhere else.
The United States still consumes more oil than any other country, but demand is weak and imports are falling. That leaves China, which overtook the United States late last year as the world’s largest oil importer, as the single biggest influence on global demand for fuels. China’s consumption has risen 28 percent in five years, to 10.2 million barrels per day last year.
‘‘There’s an 800-pound gorilla in the picture now: the Chinese economy,’’ said Patrick DeHaan, chief petroleum analyst at GasBuddy.com.
US refiners are free to sell gas to the highest bidder around the world. In 2011, the United States became a net exporter of fuels for the first time in 60 years. Mexico and Canada are the two biggest destinations for US fuels, followed by Brazil and the Netherlands.
Two other factors are making gasoline expensive:
■ High oil prices. Brent crude, a benchmark used to set the price of oil for many US refiners, is $108 per barrel. It has not been below $100 per barrel since July. On average, the price of crude is responsible for two-thirds of the price of gasoline, according to the Energy Department.
■ Refinery shutdowns. Refineries temporarily close in the winter, when driving declines, to perform annual maintenance. That lowers gas inventories and sends prices higher nearly every year in the late winter and spring.
Rising gasoline prices act as a drag on the economy because they leave less money in drivers’ wallets to for them spend on other things. But because average prices have remained in a consistent range — between $3 and $4 per gallon since the end of 2010 — economists say their effect on growth has been minimal.
For the year, prices are forecast to average $3.55 per gallon, slightly lower than last year’s record average of $3.63.
The peak for 2013, likely to come this spring, is expected to fall slightly short of last year’s peak of $3.94.