The Energy Information shows us that gas in July was the lowest it had been since June 2004. The combination of a soft economy and better fuel efficiency is contributing to a lower demand. The lower demand for gas means gas prices get to go up.
Gas demand drop
Over 2008, the demand for both gasoline and oil dropped significantly. Individuals paid $ 4 and more for gas because of the drop. There were also more fuel efficient and hybrid cars created. By the end of 2009, more fuel efficient autos were being made but the demand went up. The demand for oil involves more than just gasoline, though, as a demand for fuel and heating oil tends to go up in the winter months.
Production of U.S. oil
There is a strong connection between U.S. oil production and gas prices. 28 percent of all oil requirements are supplied in the U.S. although that has changed just a little since offshore drilling is shut down. There have to be more imports now since oil is being produced less.
Summer driving
Summer driving has made the demand for oil lately go up. According to the Automobile Association, there will be further road trips taken by individuals this summer meaning more driving.
U.S. fuel comparisons
The largest consumer of fuel is surely the U.S.. China is the second-largest consumer of gasoline, but demand in China is quickly increasing to levels that could make it first. There are heavy taxes in European countries on gasoline meaning gas can costs $ 8 per gallon in some places. Since supply is going down when demand goes up, numerous people could have no other choice then to switch to fuel efficient vehicles.
