North Texans Coping With Higher Gas Prices Despite Plenty Of Texas Oil
DALLAS (CBSDFW.COM) - Heather Hall jumped from her black SUV Tuesday, and started filling her gas tank.
"$73.99. Wow, that hurts," the Dallas area resident said. "It has to be the inventory shortage, right? We don't have truckers, or there's no one to deliver the gas," Hall questioned.
The current fuel rates per gallon statewide continue to hover above $3.00.
At the same time, Texas oil production in the Permian Basin of West Texas is seeing record production levels, along with price per barrel hovering at $80.
West Texas is producing over four million barrels a day, government records show.
With so much Texas oil production, why are consumers paying more at the pump?
"Demand is recovering faster than supply, so that's causing the market to increase prices," SMU Cox Maguire Energy Institute Director Bruce Bullock said Tuesday.
Bullock points to the global oil market, saying gas prices for consumers are determined by the worldwide demand and supply. "We are in a global oil market. The market is always cyclical. It goes up and down.
Demand for fuel is recovering faster than supply, so that's causing the market to increase prices," he says.
Texas is the nation's largest producer of oil and gas. Current production rates are at record levels.
The industry is an economic strong suit for the state, but according to analysts, all that oil does not automatically translate into lower prices at neighborhood gas pumps.
Bullock expects prices to eventually decline, but he says crude prices must decline first.