STATEWIDE–Gas prices increased again all across Indiana Tuesday. GasBuddy says that is a trend that will likely continue.
“It was another price cycle. After about two weeks of declining, prices jumped up. That sent prices up across Indianapolis to as high as $3.25. The average in Indy is now $3.15,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. “The national average is $3.14, which is likely pushed up in part, not just because of an increase in Indianapolis, but also across the state of Indiana.”
The reason for the continued increase is a simple one, says DeHaan. Demand remains high, but supply is low.
“On the Fourth of July weekend, OPEC was gathering to decide if they would increase oil production for August. The United Arab Emirates (UAE) and Saudi Arabia got into an argument. President Biden has also told OPEC members to increase production,” said DeHaan.
DeHaan said the argument is rather small, but could become a concern if it is not resolved.
“The foundation that OPEC used to determine how much oil the UAE can produce based on their agreements is several years old. The UAE has spent billions of dollars to increase oil production and they are upset that the baseline is not a current baseline. The UAE wants to produce more. So far Saudi Arabia is saying no to that,” said DeHaan. “It is worrisome because it shows OPEC has not agreed on any increase in production at a time when the global market badly needs more oil.”
A large amount of travel on the Fourth of July weekend just increased demand as many Americans filled up their gas tanks.
The price of oil was at $77 per barrel earlier this week before it came back down slightly.
“Right now, if you’re on empty and you can find a station that is selling it for under $3 per gallon, then fill it up. Some stations that are under $3 may go up as well. In the days ahead, the stations that are at $3.25 will likely start inching back down,” said DeHaan.
LISTEN: Full Interview with Patrick DeHaan
