Gas Prices On The Rise; Will The Trend Continue?

SAN ANGELO, TX - As the new year kicks off, there is one thing that many people keep a look out for, and that's gas prices. Prices across the country have been steadily increasing and are expected to rise as the price per barrel of crude oil also increases.

According to statistics provided by GasBuddy.com, the cost per gallon saw a constant flux in 2016. The lowest price recorded in San Angelo was $1.446 on Feb. 15, and the highest at $2.140 on Dec. 31. Prices have continued to increase throughout the first week of the new year. The city average for yesterday, Jan. 6, opened at $2.162, and trends indicate the increases could continue.

The following chart details the price fluctuation in the month of December:

Throughout 2016, San Angelo's gas prices continually increased. They dipped in February, but then went back up in March, and fluctuated the rest of the year. The chart below shows those trends of fluctuation.

An increase in the cost of crude oil is often an indication that the price will increase, but factors, such as refinery costs, all contribute to the changes. In the region, the increase in price per gallon, compared to Jan. 6, 2016,  jumped up nearly 43 cents higher, from $1.78 to $2.21. 

The chart below details that change. Despite the increase, the region priced lower overall. At the beginning of 2016, prices dipped to $1.50 a gallon, but steadily increased throughout the summer and remained fairly steady through the beginning of December. However, after Dec.12, gas prices began to increase to its current rate of $2.21.

Many experts attribute the increase of gas prices to OPEC’s recent decision to cut production next year by nearly 1 percent of the global output, CNBC reported. This would place the production level at approximately 32.5 million barrels collectively per day by both OPEC and Non-OPEC members.This would be the first cut in several years.

"Prices continue to rise due to market expectations of tighter availability following the announcement of an OPEC deal to cut oil production that is scheduled to start in January 2017," AAA said in a weekly market report.

While the 14 nations of OPEC agreed to comply with OPEC’s cap, which is expected to prevent an oversupply in the market, and in turn leads to a drop in the price of oil, several of the nations have plans to increase their output in 2017, and have the ability to do so. In the United States alone, there were 12 new oil rigs opened in December.

Across the state, the price per gallon varies substantially, but, despite that, Texas ranks as the 10th least expensive state compared to the rest of the United States.

(Note: The averages in charts and in the article reflect the cost of regular priced gasoline; higher grades are not included in the set of data.)