In mid-July, the Energy Information Administration reported that gasoline demand was at its lowest since June of 2004. Fuel efficiency has gotten better, and there is a soft economy meaning the demand for gas is lower. Gas prices are going up because of the lower demand.
Dropping gas demands
Gas and oil demand dropped throughout 2008. This drop in demand coincided with $ 4 a gallon or higher gas prices. There were also more fuel efficient and hybrid vehicles created. By the end of 2009, more fuel efficient automobiles were being made but the demand went up. The demand for oil involves more than just gasoline, though, as a demand for fuel and heating oil tends to go up in the winter months.
Production of U.S. oil
The price of gasoline is tied closely to the production of oil in the United States. Although offshore drilling being shut down has hurt this number, typically 28 percent of U.S. oil production is met inside the country. Since there is less production of oil in the U.S., more imports have to be brought to the country.
More summer driving
The uptick in demand for oil over the last few weeks has been attributed, partially, to the summer driving system. More individuals will drive longer distances this summer, reports the Automobile Association.
Comparing fuel use within the United States
The U.S. uses the most fuel. China is the second-largest consumer of gasoline, but demand in China is easily rising to levels that could make it first. In many small European countries where fuel-efficient autos are becoming more popular, fuel taxes make the price of a gallon of gasoline as high as $ 8 per gallon. Fuel efficient automobiles will probably become more popular with supply decreases.
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