Why is fuel prices rising

State Solicitor General Liz Murrill says the White House should "take the handcuffs" off energy producers if it wants to improve the situation sooner. Combined with price spikes across a variety of goods, inflation is hitting Americans' wallets and threatening the economic rebound heading into the midterm elections. The conflict is intensifying in the weeks leading up to the United Nations climate summit beginning in Glasgow, Scotland on Nov.

According to progressive lawmakers, Biden has said he needs to show up with a trillion-dollar policy framework on climate change to protect "American prestige. Skip Navigation. Key Points. The White House has acknowledged it has limited options to address the problem.

Neither is another guy often blamed: a sitting president of the United States , who does not control gas prices. But a lot has changed in the oil markets since March , when the pandemic began taking its toll on the economy.

It took more than a year for demand to come back to normal levels. At the same time, less oil is being produced. It remains to be seen where oil prices will head over the next few months.

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View Upcoming Webinars. It's gotten even worse since then. Data from the US Energy Information Administration , which found gas prices rising throughout , hitting levels not seen since the middle of the last decade. The reasons for the price spike are textbook supply and demand from an economics textbook: Americans have gotten back to driving more this summer as the pandemic has moderated, and a combination of domestic supply interruptions and trouble in energy markets overseas have made crude oil more expensive.

Lockdowns and the uncontrolled early spread of the virus led to canceled travel and a sharp reduction in commutes. By summer , however, Americans were back on the road. The number of vehicle miles traveled measured by the Federal Highway Administration plummeted in spring , but in the last few months, highway traffic was back up to what would normally be seen in midsummer:. That increase in the amount of driving Americans are doing also means an increase in demand for fuel for cars.

While rigs and refineries have quickly come back online since, crude oil inventories remain low, suggesting an ongoing lack of supply. Other EIA data shows that crude oil inventories across the country remain subdued:.

A crunch in domestic oil supply and stockpiles coupled with a rise in demand leads to higher gas prices. In addition to domestic oil supply slowing down, oil and energy markets overseas also aren't helping matters on the supply front.

OPEC and other major oil-exporting countries have repeatedly agreed to only modest increases in production, despite oil consumers like the US and India pushing for higher exports, according to CNBC. The cartel most recently agreed to increase production by just , barrels per day in December, after President Joe Biden directly called for more production to ease rising prices.

It also shows how the cartel of oil exporters still holds a huge amount of power in global oil markets, even as the US has vastly increased production over the last decade and countries around the world begin the process of moving toward greener energy sources.