Instead, to find out why gas prices are going up despite the continued decline in oil prices, just blame good old supply and demand.
Consumer demand is actually increasing, up 1.7% last month from a year ago. Felmy notes that gas was $3.14 on average a year ago, all the way down to $1.91a gallon as of yesterday. Despite the recent price jump in gasoline, gas prices have been on a downtrend since Feb. 14.
“Consumers tend to have lifestyles that involve activity,” Felmy says. They’re out driving and realizing that the cost of filling up is much lower than it was not long ago.
So, why the disparity between what’s being said and what’s actually happening? Felmy has one idea.
“There’s too much discussion of how bad the economy is…gas demand is not consistent with that.”
United States Gasoline (UGA) is up 4.1% year-to-date.