ORLANDO, Fla. — Florida drivers are feeling even more pain at the pump as the ripple effects from the pandemic continue to play out in the crude oil market, according to the American Automobile Association.
AAA said Florida gas prices surged 12 cents last week, rising from $3.05 to $3.17 per gallon.
The price of crude surged last week on concerns that what was already a tight global fuel market could get even tighter this winter.
Sunday’s state average was the highest daily average since October 2014, at $3.17.
“The recent jump at the pump is directly tied to rising futures prices,” said Mark Jenkins, a spokesman for AAA. “The higher crude price raises the cost of producing gasoline. Unfortunately, it’s not clear when these prices will come back down.”
AAA reported that the price of US crude jumped 5% last week. For context, crude rarely exceeded $75 per barrel this year. However, on Friday it briefly traded above $80, before ultimately settling at $79.31, which was the highest daily settlement price since October 2014.
“What’s moving the market right now are concerns of what would happen if this winter is colder than normal,” AAA reported. “The issue is, natural gas prices in Europe and Asia have tripled — to a level that would be the equivalent of oil prices reaching $200 per barrel. This has speculators worried that the countries affected would turn to the oil market for heating and power generation.”
Last year, global production declined after the pandemic caused fuel demand to collapse. This year, demand has rebounded, but oil producers have not kept pace. Prior to the pandemic, the global market was oversupplied. Now demand outpaces supply, AAA reported.
“Fortunately, the US may be shielded from the natural gas crunch, since US supplies are strong and very little of it is typically exported. Unfortunately, the US is not shielded by the tightness in the crude market, which has always been influenced by global factors,” AAA reported.
The average gas price in Orlando is $3.15 a gallon.