Gas prices continue to rise in Florida and nationwide, and as of Tuesday, data from AAA shows the average cost of a gallon of gas in our state holding steady at a record $4.76, most Central Florida local counties reporting similar averages, only Brevard It shows a slightly lower average, at $4.73, while the national average is crawling toward $5, at $4.91. AAA says a combination of tightening global supplies and high demand are the main reasons for suffering at the pump, and experts advise avoid speeding, and combine your tasks to reduce driving time and reduce air-conditioning use, what is causing prices to rise? Russian oil: Even with high inflation and slower growth raising the specter of a recession, it is unlikely that global oil demand will fall enough to bring prices down, as it did in 2008. “The worry this time — because it’s a supply side issue — and Smith said that Even if we’re heading into a recession…we may not necessarily see prices at the pump drop significantly.Russia due to its invasion of Ukraine.Most EU countries now have six months to phase out Russian crude imports, and eight months for all other oil-product suppliers.According to According to Kpler data, crude oil imports from Angola have tripled since the start of the war, while Brazilian and Iraqi quantities have increased by 50% and 40%, respectively, and sourcing oil from remote locations will keep prices high, Raslan Khasawneh, a senior oil analyst, said. The fuel at Vortexa, an energy data company, told CNN Business: “The direct effect of that is higher freight costs due to longer flights, and therefore oil delivery costs.” It could do some things to ease prices, including introducing fuel subsidies and setting prices in the pump. But the magic bullet the world really needs to cut prices – too much supply – is hard to come by. Russia has already created a huge gap in the market. Russia shut down nearly 1 million barrels per day of oil production in April, and this could reach about 3 million barrels per day during the latter half of 2022, according to the International Energy Agency. As OPEC + agreed on Thursday to pump an additional 648,000 barrels of crude per day into the global market in July and August – 200,000 more than planned – in a deal that included Russia, the International Energy Agency expects global oil production, excluding Russia, to rise by more of 3 million barrels per day for the rest of this year, equaling the impact of sanctions, but Smith thinks this could be difficult to achieve. Even before the war in Ukraine, he said, oil producers were cutting investment in production as they turned toward renewable energy. And OPEC has its limits. “OPEC+ is already struggling to keep up with the current agreement – even core OPEC members like Saudi Arabia, the UAE and Kuwait exported much less last month than they did in April,” he said. “Several OPEC+ member countries have already reached the limits of their production capacity,” investment bank UBS said in a note Thursday. “This means that effective production increases are likely to be about half of the target increase,” he said. In Shanghai, Beijing and other major Chinese cities, it reduced demand in the world’s largest oil importer, but as the Chinese government begins to remove these restrictions, pent-up demand may raise prices. China could also increase its oil imports from Russia, whose benchmark crude grade is traded in the Urals at a discount of $34 a barrel to Brent. Vortexa estimates that China imported 1.1 million barrels per day of seaborne Russian oil in May, an increase of about 37% according to last year’s average. Kpler’s Smith said he does not expect demand in China to return “quickly” due to its gradual approach to deregulation. But “the biggest bearish impact on prices has been eliminated, hence another reason to expect to see prices supported around current levels going forward.” The demand for fuel in the US has also proven to be fairly resilient despite the surprising prices. In the week ending Saturday, the amount of gas pumped into US gas stations fell just 5% compared to the same week a year ago, according to OPIS, which tracks gasoline prices and consumption data, and that modest drop occurred with the national average price. It rose more than 50% year over year to $4.60 a gallon in late May.
Gas prices continue to rise in Florida and nationwide.
As of Tuesday, AAA data shows that the average cost of a gallon of gas in our state is steady at a record $4.76.
Most local Central Florida counties report similar averages, only Brevard showing a slightly lower average, at $4.73.
The national average is crawling around $5, at $4.91.
AAA says a combination of tight global supplies and rising demand are the main reasons behind the pain at the pump.
Experts advise avoiding speeding and combining your errands to reduce driving time and reduce the use of air conditioners.
What is the reason for the price hike?
Europe abandons Russian oil
Although high inflation and slower growth are raising the specter of a recession, global oil demand is unlikely to fall enough to bring prices down, as it did in 2008.
“The concern this time – because it’s a supply-side issue – is that even if we were heading into a recession … we might not necessarily see prices at the pump drop significantly,” Smith said.
The European Union on Friday formally adopted an oil embargo, which is part of the sixth package of sanctions imposed on Russia over its invasion of Ukraine. Most EU countries now have six months to phase out imports of Russian crude, and eight months for all other oil products.
Smith said the bloc will likely continue to buy some oil from Russia for now, but is shopping for alternative suppliers. According to Kpler data, crude oil imports from Angola have tripled since the start of the war, while Brazilian and Iraqi quantities have increased by 50% and 40%, respectively.
Getting oil from more remote locations will keep prices high, Roslan Khasawneh, chief fuel oil analyst at Vortexa, an energy data company, told CNN Business.
“The direct effect of this is the higher cost of freight due to long flights, and therefore oil delivery costs,” he said.
Governments can do some things to ease prices, including introducing fuel subsidies and setting prices at the pump. But the magic bullet the world really needs to cut prices – too much supply – is hard to come by.
Not enough alternatives
Last year, Russia took 14% of global oil supply, according to the International Energy Agency, and Western sanctions against Russia are already creating a huge gap in the market. Russia shut down nearly 1 million barrels per day of oil production in April, and this could reach about 3 million barrels per day during the latter half of 2022, according to the International Energy Agency.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC+, agreed on Thursday to pump an additional 648,000 barrels of crude per day into the global market in July and August – more than 200,000 barrels – in a deal that included Russia. .
The International Energy Agency expects that global oil production, excluding Russia, should rise by more than 3 million barrels per day for the rest of this year, offsetting the impact of the sanctions.
But Smith thinks this may be difficult to achieve. Even before the war in Ukraine, he said, oil producers were cutting investment in production as they turned toward renewable energy. And OPEC has its limits.
“OPEC+ is already struggling to keep up with the current agreement – even core OPEC members like Saudi Arabia, the UAE and Kuwait exported much less last month than they did in April,” he said.
“Many OPEC+ member countries have already reached the limits of their production capacity,” Giovanni Stonovo, strategist at investment bank UBS, said in a note Thursday.
“This means that effective increases in production are likely to be about half of the target increase,” he said.
Strong global demand
For months, coronavirus-induced lockdowns in Shanghai, Beijing and other major Chinese cities have dampened demand in the world’s largest oil importer.
But as the Chinese government begins to remove these restrictions, pent-up demand could raise prices. China could also increase its oil imports from Russia, whose benchmark crude grade is traded in the Urals at a discount of $34 a barrel compared to Brent.
Vortexa estimates that China imported 1.1 million barrels per day of seaborne Russian oil in May, about 37% more than last year’s average.
Kpler’s Smith said he did not expect demand in China to return “strongly” due to its gradual approach to deregulation.
But “the biggest bearish impact on prices has been eliminated, and then there is another reason to expect to see prices supported around current levels going forward,” he said.
Fuel demand in the US has also proven to be fairly resilient despite the amazing prices. In the week ending Saturday, the amount of gas pumped into US gas stations fell just 5% compared to the same week a year ago, according to OPIS, which tracks gasoline prices and consumption data.
That modest decline occurred with the national average price rising more than 50% year-over-year to $4.60 a gallon in late May.
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