Carol Thorp Demand Quotations

Nationally, production is down and demand is up compared to last year. In addition, many regions of the country are having trouble getting sufficient supplies of ethanol, which is used in new formulas for gas. Uncertainty about supply has lifted gasoline to near-record prices on the spot market and that filters down to the neighborhood gas pump.

Southern Californians have reduced their driving significantly in the past couple of months. Additionally across the nation, demand for gas is down 2 percent from this time last year.

The relationship between supply and demand is relatively balanced in California, so normally we should see stable prices. However, speculators in oil and gasoline markets have kept prices high, and that has filtered down to local gas pumps. The trend for higher gas prices is expected to continue for the next several weeks.

Californians use 2 million gallons more of fuel every day than we produce in the state. Oil companies have to buy gas from other sources just to keep even with demand. If every motorist were to save two gallons every week, that would put our demand more in line with our state production.

Gas prices dropped at a slightly slower pace than the prior week, which can be attributed to level crude oil prices and the increased demand over the holiday weekend. However, analysts tell us there is still some room for prices to drop in the coming weeks.