API Addresses Record-High Gasoline Prices

American Petroleum Institute (API) held a press conference Tuesday addressing high gasoline prices and noted that more crude oil production and efficient consumption of oil products are key to addressing higher gasoline prices, API's Chief Economist John Felmy told reporters.

"We have very large oil resources here in the United States and technologies that are making more of them accessible and economic to produce," he said. "Given reasonable regulations, expanded access to resources on federal lands and waters, and fair tax policy, we can bring several million more barrels per day of crude oil to market. It could create more than one million new jobs, reduce our dependence on foreign energy, and increase revenue to the government by billions of dollars a year."

API reported that as of last week, the average U.S. retail price for regular gasoline was $3.78, about 56 cents per gallon higher than two months ago. Crude oil prices are largely set on international exchanges which are determined by global supply and demand. Crude oil prices increased $12 a barrel, or 29 cents per gallon, between December and February, stated API. During that same period, the price of gasoline increased.

Due to a strong demand for world supplies, crude oil prices have increased. There's more optimism about the global economy, which is growing faster and demanding more oil, according to the Energy Information Administration's short-term outlook. However, crude supplies fail to keep up with the demand. In January, domestic crude oil production went above 7 million barrels of oil per day in the United States for the first time in more than 20 years but international production has been less robust, API stated.

"We have not done a good job of expanding opportunities for domestic oil and gas development in federal areas," he said. "The vast majority of the nation's offshore oil resources continue to be off limits."

The organization also stated that if the United States approves the Keystone XL pipeline, the increase in capacity for bringing Canadian oil into the United States would encourage more production into Canada's rich oil sands region. API also reiterated that if supply is increased, than demand is reduced.

"With gasoline prices already approaching $4.00 per gallon and projected to reach all-time record highs during the upcoming driving season, the economy continuing to struggle and unemployment rates refusing to come down, developing domestic energy resources is more important now than ever," said Michael Whatley, executive vice president of Consumer Energy Alliance, to Rigzone.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Kim Nibarger | Feb. 27, 2013
So average cost of gallon of gas in Feb 2012 was 3.73 and crude was 108.52. Average cost of gallon of gas today is 3.78 and crude cost is 92.08. But the only way to get the price of gas down for consumers is to be able to drill more and build more pipelines? Since crude supply is down and price is up? Not the numbers I see. What is up are the oil industry profits.

Gregory Jones | Feb. 27, 2013
Enough baloney from API and CEA to make several sandwiches. Domestic production is up (a full 50% increase from my state over the past 4 years), inventories are at or near all time highs, and consumption is down. Im not aware of the export of any crude from the US so why should international markets set domestic price. Current regulations are reasonable, access to federally controlled resources is greater than the capacity to drill, and tax policy is more than fair to the industry. If it were pure traditional market forces at play, the price of gasoline should be declining. The only upward pressure I am aware of is the cost of drilling and completion. And those prices are established by the service companies.

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
United States Houston: Account Rep, Bus Dev, Sr
Expertise: Business Development|Sales
Location: Houston, TX
Business Development Manager
Expertise: Business Development|Construction Manager|Sales
Location: Tempe, AZ
Manager, Operations Excellence
Expertise: Executive
Location: Houston, TX
search for more jobs

Brent Crude Oil : $50.47/BBL 0.98%
Light Crude Oil : $49.72/BBL 1.09%
Natural Gas : $2.76/MMBtu 1.09%
Updated in last 24 hours