Gas price rises nationwide fueling speculation of energy crisis

Gas prices

Gas prices have been rising for the past two weeks, and there is speculation that an energy crisis may be imminent. Photo Credit: Micov/Wikimedia Commons/CC-BY

The average gas price is rising in every U.S. state and may hit $4 per gallon soon. Unrest in Libya, a major petroleum exporting country, has caused the price of petroleum to rise, which is causing the price of gas to rise as well. There is speculation that the U.S. government will tap its reserves to ease market conditions.

Government may tap emergency reserves to ease burden

Continuing turmoil in Libya brought oil exports in that country to a standstill, leading to a spike in oil prices. Currently, the average gas price per gallon hit $3.51 on Monday, March 7, according to CNN, and gas prices are on track to possibly hit $4 by summer. Prices have been rising daily for the past two weeks, increasing by 34 cents over that time. To curb runaway prices, the Obama administration is considering tapping into the U.S. Strategic Petroleum Reserve, according to Reuters. The Reserve is a storage facility that contains nearly 730 million barrels of crude oil, roughly equal to a one-month supply of oil for the entire United States. However, administration officials maintain that reserves will only be used if needed. The last release from the reserves was in 2005, after the Hurricane Katrina disaster, and it has only been used three times since it was established during the Nixon administration.

Prices skyrocket

Since Libya has plunged into unrest, there has been some trepidation in the world market for oil, but not because of a drop in supply. Libya produces less than 2 million barrels per day, and exports little oil to the United States. Saudi Arabia, by contrast, produces more than 12 million barrels per day, according to the Department of Energy. The Saudi government has also increased oil production by 25 percent, which will cover any losses due to a drop in production in Libya. The rise of gas prices is not due to a shortage in supply; rather, markets are uneasy because political turmoil is spreading to other oil exporting countries. A revolt in Libya is not catastrophic in terms of world oil exports, but revolts in Saudi Arabia would be.

Check with Gasbuddy

A good way for people to find the most reasonable gas prices in their area is to look at the website Gasbuddy.com. Gasbuddy is a network of websites where members report gas prices they see in their area. The Gasbuddy network extends from coast to coast, so there are few places in the U.S. or Canada that do not have some information posted. There is even a Gasbuddy app available for iPhone, Android and Windows smartphones. Since Gasbuddy relies on people reporting the gas prices they see, the site is fast becoming a resource that is quoted by major news agencies as well as a valuable tool for consumers.

Sources

CNN

Reuters

Department of Energy website for world energy information

Gasbuddy

Other recent posts by bryanh