Now why is gas going up

Scott Galloway weighs in. Why global investors are focused on Evergrande. Petco CEO explains how 11 million new pets in boosted the business. Energy demand is back today as the world economy reopens -- but supply simply hasn't kept up. Crude gained 1. Gas prices are at 7-year highs, and Biden can't do much about it. All of this is leading to sticker shock for many Americans filling up at the pump -- at a time of the year when gas prices typically cool off. High gas prices will only exacerbate elevated inflation, squeeze the budgets of American families and hurt President Joe Biden's political fortunes.

Read More. Unfortunately, prices at the pump may get lifted even higher by the global energy crisis. Natural gas prices have skyrocketed so much , especially in Europe and Asia, that power plants and factories may increasingly turn to a relatively cheaper fuel source for electricity: crude oil.

The Wall Street bank cited "price contagion this winter" and the expected switching of power plants away from sky-high natural gas to oil. Citi added that a "very cold winter" could see Europe "running out of gas" by February. Oil has long been there as a potential substitute for natural gas -- except until recently, it didn't make any financial sense. That's because for much of the past dozen years, natural gas prices have been very low, making switching to oil uneconomical. Get the latest headlines delivered to your inbox every weekday.

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Dallas police arrest 2 men in slayings of man, woman during gun buy in west Oak Cliff last month. While rigs and refineries have quickly come back online since, crude oil inventories remain low, suggesting an ongoing lack of supply. Other EIA data shows that crude oil inventories across the country remain subdued:. A crunch in domestic oil supply and stockpiles coupled with a rise in demand leads to higher gas prices.

In addition to domestic oil supply slowing down, oil and energy markets overseas also aren't helping matters on the supply front. OPEC and other major oil-exporting countries have repeatedly agreed to only modest increases in production, despite oil consumers like the US and India pushing for higher exports, according to CNBC.

The cartel most recently agreed to increase production by just , barrels per day in December, after President Joe Biden directly called for more production to ease rising prices. It also shows how the cartel of oil exporters still holds a huge amount of power in global oil markets, even as the US has vastly increased production over the last decade and countries around the world begin the process of moving toward greener energy sources. Broader energy markets have been facing supply shortages as well.

European natural gas and electricity prices have skyrocketed , and traders expect higher oil and other energy prices for months to come. Russia, a key provider of natural gas to the EU, has held back on increased deliveries to the West , keeping prices volatile and high. Put together surging demand from the US reopening with supply crunches both domestic and global, and it should be no surprise that gas prices are spiking.

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