U.S. gasoline demand has dropped to a 12-year low, yet consumers are paying the highest-ever prices for this time of year. The reason: Rising global oil prices are in the driver’s seat.
The paradox isn’t limited to the gasoline pump. Home-heating oil users will see record-high bills, despite using less fuel, according to an Energy Information Administration forecast.
Diesel fuel prices are up 25% from a year earlier at record November levels, fueled by a powerful one-two punch of surging demand both in the U.S. and abroad, the EIA and analysts added.
Prices for gasoline, diesel and heating oil are determined by global demand and worldwide crude prices. That notion is sometimes lost, with the emphasis misplaced on the U.S. benchmark.