Better gas up now, because prices at the pump in San Antonio have begun to go up, and could reach highs not seen for three years before they begin to fall, News Radio 1200 WOAI reports.
AAA Texas reports we're paying $2.22 on average in San Antonio today, but spokesman Daniel Armbruster says as we move into March, we can count on those prices rising.
"Its not out of the norm to see gas prices start rising as we get closer to the spring," Armbruster said. "Refineries are shutting down for their routine maintenance, and then switching to more expensive summer blend gasoline. Demand goes up in the summer as well, and this summer's prices are expected to be three year highs."
Despite record U.S. crude oil production, several factors are contributing to the rising gas prices, mainly stronger demand brought on by the strong global economy. Not only does that mean more people are commuting to work, but factories and offices are running at full capacity.
The U.S. Energy Information Administration says U.S. crude oil production set a record in November, with an average of 10.6 million barrels of oil produced daily. That breaks a record set way back in 1970. The EIA expects U.S. production to average 11 million barrels a day by the middle of 2018.
But that alone isn't enough to offset production issues elsewhere, mainly in Venezuela. The basket-case nation has the largest petroleum reserves in the world, but is down to producing essentially no crude oil, due to government incompetence and corruption.
And, while 11 million barrels a day may sound like a lot, the U.S. uses 19 million barrels a day, which means, although the U.S. has surpassed Saudi Arabia in output, and now trails only Russia, the U.S. remains a net importer of oil and is expected to remain so.
Demand is also driven by the fact that, even though prices are rising, they remain far lower than we got used to in the last decade, when fuel routinely cost more than $3.50. That has not only revived interest in the Great American Road Trip, but has suppressed sales of hybrid and electric vehicles, because the higher price for electrics is now too high to offset the savings in gasoline.
"If prices do reach the $2.70 mark, which is where prices are expected to go, we haven't seen prices like that since about 2015," Armbruster said.