Winter weather, geopolitical tension and the pandemic have all led to more expensive oil. Cold weather Demand for crude oil products, including motor fuel and heating oil, has driven up prices. The price of oil was $93.55 per barrel at the time of this report, compared with about $60 a year ago. Frigid weather across the U.S increased the demand for heating oil. Pandemic Americans’ return to offices and schools has increased the demand for motor fuel. Gasoline demand is up 16% from the year before. When gasoline demand increases, that generally results in higher prices.
Geopolitical tensions Prices climb when oil supplies are threatened. If major oil-producing countries continue to produce a lot of oil, the supply will be high, and gas prices will decrease. On the other hand, war or conflict can threaten crude inventories, causing gas prices to soar.
Supply and demand In simple terms, it all comes down to supply and demand. Currently, there’s more demand than supply.
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