Why Do Gasoline Prices Remain High?

Posted May 19, 2014 at 7:36am

CNBC reports that “rumors about the demise of U.S. gasoline demand have been greatly exaggerated.”  

“Until late 2013, most energy observers forecast the world’s most reliably gas-guzzling market to consume less fuel this year. What was once thought to be a structural decline in demand, however, has proven more durable than expected.”  

“As the summer driving season nears, retail gas remains stubbornly lodged near $4 per gallon. According to the Energy Information Administration, gas prices rose for 12 straight weeks through late April, and were 20 cents a gallon higher than the same point last year.”  

“So what gives?”  

“‘The world’s not swimming in crude or gasoline yet,’ said Francisco Blanch, commodities strategist at Bank of America-Merrill Lynch, in an interview. ‘Despite all the crude and gasoline production in the U.S., international markets are not tagging along.'”