The Energy Information shows us that gas in July was the lowest it had been since June 2004. There is a lower demand for fuel with the soft economy and fuel efficiency is better. Gas prices are going up because of the lower demand.
Drop in gasoline demand
Gas and oil demand dropped throughout 2008. People paid $ 4 and more for gas because of the drop. This drop also coincided with increased interest in fuel-efficient and hybrid vehicles. Fuel efficient autos are still being made although there has been more of a demand since late 2009. There is more of a demand for oil than there is for gas considering fuel for heating is needed in the winter.
U.S. Oil production
The price of gasoline is tied closely to the production of oil in the United States. About 28 percent of the daily requirement of oil in the United States is met domestically, though the shutdown of offshore oil production is starting to trickle down. With so little of the oil used by the United States being produced domestically, the small rise in demand is requiring more imports.
Increase in summer driving
There has been a rise in oil demand because of summer vacations requiring more driving. The American Automobile Association estimates that more and more people could be choosing to drive further this summer.
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 rising to levels that could make it first. In many small European countries where fuel-efficient cars are becoming more popular, fuel taxes make the price of a gallon of gasoline as high as $ 8 per gallon. If U.S. demand continues to increase, and supply continues to decrease, then the popularity of fuel efficient cars is certain to continue rising.
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