Bay Area Gas Prices Still Peaking as World Oil Prices Drop Below $100 a Barrel
SAN FRANCISCO (KPIX 5) -- After approaching $130 a barrel last week, oil prices are now below $100 a barrel as of Tuesday afternoon. But so far, that has not translated to lower prices at the pump.
At the corner of Laguna and Lombard Streets in San Francisco, Lyft driver Benjamin Penn is glad he upgraded to an even more fuel efficient hybrid that gets 10 more miles to the gallon. It means an extra $70 in his pocket each week.
"I'm doing better than minimum wage, but if I lean back a little bit I bump up against it," he told KPIX 5. "It's really tight. I'm not going out to dinner, there's no extra money anywhere."
With crude oil dropping, the big question is: when can we expect gas prices to do the same?
"I think there was a lot of speculation last week around the announcement about Russian crude oil imports into the United States and that certainly drove market volatility," said Frank Macchirola with the American Petroleum Institute. "But that supply demand that imbalance and the constraints within the marketplace still remain."
This all comes on the heels of a U.S. ban on Russian oil, which only makes up 3% of U.S. usage.
"I think what you're seeing is that even though Russian crude is a small percentage in California, Russian crude impacts the global markets differently," said Kevin Slagle with the Western States Petroleum Association. "So, even if you take that 3% out of California - refiners need to go on the global market to replace that. There is still in an impact, but at 3% there's not as much as other parts of the world and Europe."
The U.S. Energy Information Administration anticipates the country will increase production significantly this year starting in April -- with an expected increase of 117,000 barrels per day. Slagle says more could come out of California if permits were approved.
"There are more than a thousand permits out there right now for shovel ready projects. If those were approved in relatively shorter order, you could see some production increases and probably enough to make up for that three and half percent from Russia," said Slagle.