WASHING TON: Texas to the Dakotas, oil output has surged, ranking America once again among the world’s top energy producers. But, the boom hasn’t stopped rising gasoline prices. Unleaded regular had pushed over $2.60 per gallon nationwide by midweek, up from $2.26 a gallon a year earlier, reported AAA’s daily price survey. Analysts expect gas prices could climb another 10 cents by early spring, a gain of almost half a dollar in a year. For the typical driver putting 250 miles per week on a V-6-powered Ford F-150 pickup truck, the nation’s top-selling vehicle, gasoline for the daily commute to work will cost about $39 per week, up from about $31 last spring. It’s happening across the country, and few experts think it could fade away soon. Instead, energy-fed inflation could weigh on Washington policy makers later this year when they mull possible interest-rate increases. Investors looking for quick profits had touched off the dramatic rise in oil prices a decade ago. The benchmark U.S. crude oil surpassed $110 per barrel. Unleaded regular gasoline crested in September 2008 at $4.11 per gallon on average. But heavy losses battered money managers by 2015 and they left the market.
That’s when surprisingly big finds of U.S. shale oil and new drilling techniques reached refiners in high volume, a glut that filled tank farms and sent prices plummeting to $40 per barrel. Alarmed by the so-called oil fracking boom in America, Saudi Arabia’s leaders marshaled the cartel known as the Organization of Petroleum Exporting Countries in a bid to push up global oil prices by first tearing them apart, trying to drive out U.S. producers. Trying to sustain its huge domestic social programs made possible by oil exports, the Saudis shipped oceans of oil worldwide. At many U.S. gas stations, unleaded fell below $1.90 per gallon. Although a spate of bankruptcies shook the American Great Plains, home of the largest frackers, survivors learned to produce at lower cost using machines to extract oil from layers of sand and rock. Realizing the frackers were dug in and restoring U.S. oil output to high levels last seen in the 1970s, the Saudis retreated from the price war last year. As the oil glut eased and speculators pushed in, demand for gasoline held steady as U.S. motorists logged 1.1 trillion miles per year on 300 million cars and trucks. Oil nosed over $71 per barrel in late January and has leveled off around $66, marking the end of the three-year spell of low prices, Kloza said. The average family is going to pay $40 to $50 more for gasoline this year than last year,” Kloza estimated. “And $90 over what they paid in 2016. That’s still $50 to $100 lower than what they paid every year from 2011 to 2014.”
