The United States recently saw a significant increase in retail gasoline prices. According to the official data, the previous decline was conditional upon the response to the pandemic, which caused lower demand as well as low crude oil costs combined with critical supply constraints (“The Week in Petroleum”). Therefore, this event positively correlates with the efficiency of measures implemented against COVID-19 and the elimination of travel restrictions.
The comparison of indicators before the spread of COVID-19 and over the following year shows the dependency of supply and demand on external factors. Thus, the former shifting indicators were affected by cold weather outages throughout the country, which was followed by rising imports, whereas the latter was determined by the low mobility of citizens (“The Week in Petroleum”). In this way, the environment was the principal aspect, which allowed for predicting changes in this field.
At present, the ongoing recovery defines the gas prices in the United States, which are gradually increasing. By now, regular retail rates were reported to be on average 92 cents higher compared to the previous year (“The Week in Petroleum”). This tendency also corresponds to the considerations of evolving supply and demand, which fluctuate depending on seasons or regions (“The Week in Petroleum”). Therefore, the decline in inventories alongside the increasing mobility of people allows for predicting further growth of these indicators.
In conclusion, the described trends in gasoline prices are aligned with changes in demand and supply. Due to the pandemic, the presence of large inventories and unfavorable conditions for their realization was combined with travel restrictions. As a result, the retail rates were low, and a dramatic change happened as soon as the latter barriers were lifted. Thus, the consideration of profits alongside the growing needs of people in gasoline confirms new patterns of price formation in the United States in the long run.
Work Cited
“The Week in Petroleum.” The U.S. Energy Information Administration. 2021. Web.