GRAND RAPIDS, Mich. (WOOD) — Average gas prices in West Michigan have spiked to their highest point of the year and are now higher than they have been in years.
Experts say the ongoing pandemic is to blame.
The price for a gallon of regular unleaded rose to around $3.39 last week. That’s the most expensive it has been since 2014, GasBuddy.com petroleum analyst Patrick De Haan said. Crude oil is also trading at its highest price point since 2014 at around $81 per barrel.
“A lot of that remains challenges due to COVID-19,” De Haan told News 8 Monday afternoon in a Zoom call. “…You’ll remember back in the early days of the pandemic when we were cheering that gas prices dropped to $1.30 a gallon, oil companies were busy letting thousands of workers go and shutting in oil production as quickly as they could. Now that things have recovered, demand is up, but oil companies struggling to bring that production back online. We’re still about 2 million barrels a day of oil production lower than where we were prior to COVID.”
Also contributing to the cost is what De Haan described as a “looming energy crunch” in China. The Chinese government has recently instituted rolling blackouts due to low coal inventories. Europe has its own energy problem: a natural gas shortage. That is driving concerns about an increased demand for oil in those regions.
Those factors together mean that it’s probably not going to get much better anytime soon, De Haan said.
“In the last … six weeks or so, what’s been ongoing overseas has been driving oil prices up against what we usually see seasonally, which is falling prices,” he said.