AAA releases Holiday 2021 gas prices forecast
PEORIA (25 News) - Yesterday we reported that gas prices were on the rise due to supply and demand issues and that is indeed correct. AAA, The Auto Club Group has released their prices forecast for the 2021 Holiday Season and unfortunately, they predict a few more cents increase is likely.
This is not what it typically looks like. After the summer travel months, where gasoline is at its peak demand, prices usually trend downward near the holidays. This time it is going the opposite direction and it is once again due to supply issues. Winter gasoline mixes are often cheaper to make and thus will be cheaper at the pump, but a spokesperson with AAA says that is not the case this year.
“Gas prices in the winter usually do go down. There are two types of gasoline there’s the winter blend. In the summer blend. The winter blend is usually less expensive to make. However, the components to make it up are becoming more expensive.” Said Molly Hart, Spokesperson for AAA.
Gasoline prices are based on multiple factors, but the most important factor is the price of crude oil. The price of oil will correlate to the price of gasoline and depending on supply and demand, the price can go up or down. If demand is high, which it is currently, the price of gasoline increases. When demand is low, like much of 2020 during the Pandemic, the price falls.
There has been significant rebound in the economy since the height of the Pandemic, however oil production has not rebounded at the same rate, allowing prices to rise to higher levels than they have been in years.
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