The Energy Information shows us that gas in July was the lowest it had been since June 2004. The combination of a soft economy and better fuel efficiency is contributing to a lower demand. Gas prices are going up because of the lower demand.
Dropping gas demands
In 2008, demand for oil and gas dropped. This drop in demand coincided with $ 4 a gallon or higher gas prices. There were also more fuel efficient and hybrid cars created. Fuel efficient cars are nevertheless being made although there has been more of a demand since late 2009. In the winter, more oil is needed for heating so the demand for oil is more than the demand for gas.
Producing oil in the U.S.
The price of gasoline is tied closely to the production of oil in the United States. 28 percent of all oil needs are supplied within the U.S. although that has changed a little since offshore drilling is shut down. Since there is less production of oil in the U.S., more imports have to be brought into the country.
Summer Driving increase
The uptick in demand for oil over the last few weeks has been attributed, partially, to the summer driving system. The American Automobile Association estimates that increasingly more individuals can be choosing to drive further this summer.
Comparing fuel use within the United States
The largest consumer of fuel is definitely the U.S.. China is the second-largest consumer of gasoline, but demand in China is easily increasing to levels that could make it first. In numerous small European countries where fuel-efficient cars are becoming more popular, fuel taxes make the price of a gallon of gasoline as high as $ 8 per gallon. If U.S. demand continues to increase, and supply continues to decrease, then the popularity of fuel efficient cars is sure to continue increasing.
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