Why gas prices are rising despite demand falling
Indiana, Ohio, Illinois, Michigan saw the largest increases over past week
Demand for gasoline is falling and yet prices at the pump are still increasing.
The national average for a gallon of gasoline in the U.S. increased by two cents over the past week to $3.30, according to estimates by AAA.
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Last week, though, gasoline demand dropped from 9.72 million barrels per day to 8.17 million barrels per day while gasoline stock rose by 10.1 million barrels to 232.8 million barrels, according to AAA, which cited new data from the Energy Information Administration (EIA).
Normally, prices at the pump will drop due to lower gas demand coupled with an increase in total stocks, "but continued growth in the price of crude oil has helped to elevate pump prices," according to AAA.
Due to the fact that the "global price for oil accounts for nearly half of what consumers pay at the pump, higher oil costs will usually result in higher gasoline costs," AAA noted.
On Wednesday, West Texas Intermediate crude oil was trading at $82.86 a barrel, up from last week when prices were nearing $80 a barrel.
California still leads the country in terms of the most expensive markets with the average fuel price sitting at $4.65 per gallon. However, Hawaii and Washington aren't far behind at $4.31 and $3.93 per gallon, respectively.
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Meanwhile, Indiana, Ohio, Illinois and Michigan saw the largest increases over the past week, according to AAA.
In Indiana, drivers were hit with an increase of 17 cents. In Ohio, prices increased 14 cents and Illinois prices increased by 10 cents.
Michigan's drivers faced an increase of 9 cents.