Gas prices rise amid Russian invasion of Ukraine
Steamboat Pilot & Today
Gas prices are nearing $4 per gallon across Colorado as the cost of oil continues to increase amid the Russian invasion of Ukraine.
The cost to fill up the tank has continued to rise over the past few days, with the average price of a gallon of gas in Colorado going from $3.59 last week to $3.97 this week.
The price of gas in Frisco on Friday, March 11, ranged from $3.89 a gallon at the Conoco on Summit Boulevard up to $4.29 at the Exxon on Ten Mile Drive, according to GasBuddy.com. Several other local gas stations sat at $3.99 per gallon.
Skyler McKinley, regional director of public affairs for AAA, said drivers across Colorado should expect prices to continue to climb.
“Colorado’s gas prices are verging on record highs,” McKinley said.
Although the Russian invasion is playing a role in higher prices at the pump, the cost of gas was on an upward trajectory prior to the invasion of Ukraine.
As pandemic restrictions have eased across the country, increased travel has caused demand to outpace supply, driving oil prices higher.
A series of regulatory changes implemented by President Joe Biden’s administration have reduced U.S. oil and gas production, and those restrictions play into the current situation since supply by OPEC, a collection of oil producers in the Middle East, and other worldwide producers has not kept up with the increased demand.
Biden’s decision to ban the Russian imports of oil, liquefied natural gas and coal was a bold statement, McKinley said, but it is not likely the cause of the most recent increases, because the U.S. only imports 3% to 4% of its crude oil from Russia.
“It’s a historic gesture, certainly,” McKinley said. “I think it speaks to the gravity of what’s going on … (but) most major producers and distributors and refiners were done buying Russian oil weeks ago.”
The most recent increases, McKinley said, stem from a spike in oil prices, which is a function of the fact that Russian oil has not been on the market.
“The variations between last week and this week – and there have been increases – are starting to be factored into what we pay at the pump, but there is that lag,” McKinley explained. “Folks have boycotted Russian oil, and the sanctions announced by the president (Tuesday, March 8) relate to that, although, they probably will not move the needle significantly given that U.S. buyers have not been buying Russian oil.”
He said the increased fuel prices are likely to continue fueling inflation, as the increased cost of transportation will be absorbed by customers at places like the grocery store.
McKinley said the changing price of crude oil is likely to take consumers on an uncertain ride into the summer.
“There are some reasons to be optimistic, but I think there’s so much uncertainty, given the historic nature of the conflict in Europe, that it’s hard to say prices will go down,” McKinley said. “I think the safer bet is to expect prices will stay high through Labor Day.”
Despite the rising costs, refinery utilization rates are increasing across the country. According to Energy Information Administration data, the Rocky Mountain region increased refinery utilization by 1.9 percentage points, which signals an effort to offset the changes to oil supply in the region.
“If refiners in your region have low output, you’re more likely to see gas prices rise,” according to the Energy Information Administration.
This story is from SteamboatPilot.com. Summit Daily News contributed to this report.
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