Mass. gasoline prices up 28 cents in last month
Oil producers in no hurry to ramp up production
JUST A LITTLE over a year ago wholesale crude oil prices went into negative territory, meaning demand was so low and storage space so scarce that for the first time in history sellers were paying buyers to take barrels of oil off their hands.
But now, with COVID loosening its grip on the planet, demand for fuel picking up, and supply holding steady at relatively low levels, prices are surging. A barrel of crude is now selling in the $65 range and prices at the pump in Massachusetts have increased 6 cents a gallon in the last week and 28 cents in the past month, according to AAA Northeast.
The current average price in Massachusetts is $2.75 for a gallon of regular gasoline, up from $2.34 a year ago. Nationally, the current average price is $2.86 a gallon, up from $2.26 a gallon.The pandemic depressed demand for gasoline in 2020, wreaking havoc on the oil industry. The Organization of Petroleum Exporting Countries, led by Saudi Arabia, scaled back production and a crippling deep freeze in Texas this winter led to a downturn in production in the United States.
The big question is when worldwide oil production will start picking up. So far, perhaps scarred by the downturn in oil prices a year ago, the oil industry has shown no rush to ramp up production. If that trend persists, some forecasters say, gasoline prices could hit $4 a gallon in some states by this summer, which would be an astounding increase.