Gas price trends: What you need to know
Gas prices have increased in all major metropolitan areas in the United States this week, but some are taking a less aggressive approach to keep prices in check.
The price of natural gas has fallen from around $2.00 per thousand cubic feet to $2 per thousand in just a few days, according to data from data company GasBuddy.
In addition, natural gas is now the cheapest form of fuel in many markets across the country.
However, the price of crude oil, the main ingredient in many oil-fired power plants, is still hovering around $100 per barrel, which is a major driver of the recent energy price spike.
A lot of the price increases in recent weeks have been fueled by demand for gasoline and natural gas, which are now cheaper than other fuels.
While the gas price spikes have coincided with increased demand for gas, other factors are playing a larger role.
As the United Kingdom, Canada, and Germany continue to implement energy efficiency policies that are reducing the amount of CO2 emitted from power plants.
In Germany, those policies are expected to help to keep natural gas prices low in the long run.
Also, energy prices in the U.S. have increased sharply since the beginning of the year, with the price per kilowatt hour (kWh) of natural oil increasing by about 30 percent over the past year.
According to data provided by the Environmental Protection Agency (EPA), that increase in natural gas price in the US has been the primary driver of energy price increases.
With a global economy in freefall, the rise in oil prices is a big reason for the spike in gas prices.
“The increase in the price is driven largely by the rise of gasoline,” said Scott G. Ehrlich, the president of GasBud.
“Gas prices have been climbing pretty steeply.”
Gas prices also reflect changes in supply and demand, including increased demand from China, a major producer of natural resources.
In addition, demand for electric vehicles, which use more renewable energy than conventional ones, has also risen sharply.
As the economy continues to recover, natural resource companies like oil producers have been ramping up production to boost demand for new oil and natural gasoline, which will likely continue to push gas prices higher.
Gas prices are also affected by weather events, like hurricanes and snowstorms, which can result in spikes in natural fuel prices.
“Natural gas prices can spike if the weather is very extreme,” said Matthew B. Ziemba, the CEO of the American Gas Association.
“It can be particularly volatile in the winter when the price may fall.”
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Featured image: The Associated Press photo illustration of the Great Plains skyline in the far north of Texas.