Gas Prices Moving to All-Time High
Written By: Bruce Walker - The New American | Posted: Friday, August 17th, 2012
From The New American
The prices that Americans pay for gas at the pump may reach an all-time high this summer. The average price is $3.70 per gallon, which is an increase of 30 cents since July and the climb in price from July to August was 9 percent. The increase is particularly concerning because a reduction in global demand, caused by a persistent world-wide recession, has kept demand for gas relatively low. Some have predicted that the price of gas will reach $3.90 per gallon before Labor Day. Gas prices have risen each month for seven straight months this year.
Americans in the Midwest have been especially hard hit. Supplies of gas in that region have been reduced because of cuts in production at four refineries in the area. Gas prices in Illinois and Michigan have risen to $4 per gallon or even higher. Wildfires in northern California have also affected refinery production, pushing gas prices up by 40 center per gallon.
What are the causes of these rising prices? Despite serious impediments to oil and gas exploration caused by federal environmental regulations, the market has responded to the higher price of oil and the oil industry has been increasing proven reserves of oil and gas, as well as increasing production in the United States. Federal regulations have increased the cost per BTU of oil and gas to be produced, but that ought to be offset, in some part, by the increase in the supply.
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