BUFFALO, N.Y. (WBEN) Drivers are doing a double take on soaring gas prices. Pump prices have shot up twenty to forty cents just in the past day across many parts of Western New York from $3.80 Wednesday to $4.20 Thursday.
"We're seeing a big spike in oil prices right now," said Caleb Silver, Editor In Chief at Investopedia. "We're looking at oil prices over $113 dollars a barrel, (as of Thursday morning). That's an eight year high."
Here in Western New York, prices are up 15 cents a gallon since Monday. The AAA National Fuel Gauge Report, updated daily, shows the average price for a gallon of regular unleaded on Thursday, March 3, was $3.90 a gallon. Up .29 cents a gallon since Valentine's Day.
When oil prices rise, it eventually makes it way to the pump. Typically, it takes about two weeks for that to happen in normal times. But Silver notes, these are not normal times.
"The expectation is that oil prices will continue to rise, which is why you're seeing retailers moving their prices up as well." He says this is what happens when you have a supply chain crunch that is being exacerbated by the conflict with Russia and Ukraine.
"Oil is a commodity that trades on the futures market, which means traders and investors are always paying for future delivery. They think prices are going to continue to rise, that's why you're seeing it translate at the pump." Silver warns that we're going to see it translate into other commodities such as wheat, barley and zinc and things that require transport. "It's pushing inflation yet another step higher."
During his state of the union speech Tuesday night, President Joe Biden said he ordered 30 million barrels of oil be released from the Strategic Petroleum Reserve. "The bad news about that," Silver said, "is that we use about 20.6 million barrels a day here in the U.S. So it's only a little more than a day's worth of oil."
There have been calls, mainly from Republicans, to urge President Joe Biden
to restart the construction of the Keystone XL pipeline. Silver says it's something that Biden put an end to, as soon as he took office. "Would they open it up? And open it up to transporting more oil and refine more products out of Canada? That's up for debate right now and a big point of contention."
He adds that it's going to be a flashpoint, as we need the oil now. "Prices are rising," he said, "and it's hurting businesses big and small."
The highest average cost per gallon ever in the Buffalo region was $4.28 in July 17, 2008
