As gas prices climb, studies show that the demand for gas has not decreased. In the United States, gasoline inventories fell by 1.8 trillion barrels, according to the American Petroleum Institute. This is the second week in a row that the demand for gasoline has not shown any real decrease.
As the cost of oil rises to above $110 per barrel, traders are watching closely to see if the stark 29% increase since February will undermine the steady demand in the U.S. According to Barclays Capital, a commodities investment company, little evidence shows any reduction in the growth of oil demand since 2010.
Consumers can expect that higher oil prices will affect gas prices. As of April 18, 2011 the Energy Information Administration reported that gasoline prices across the United States averaged at $3.844 per gallon, a rise of about 5 cents from the previous week. The EIA reports that consumers will likely experience an average increase of 32.9% during the 2011 fiscal year.
According to the EIA, summer gas price could reach an average of $3.86 per gallon, with some regions seeing prices as high as $4.13 per gallon. They prices, they say, are being affected by the disruption of oil and liquefied natural gas supplies in the Middle East, strong growth in world consumption, slow growth of non-OPEC production, and the reliance on drawdown inventories and production increases by OPEC.
The EIA warns, though, that the uncertainties within the market are many. They say that those uncertainties can drastically affect gas prices throughout 2011.