Pumping Gas

LOUISVILLE, Ky. (WDRB) -- Gas prices in Kentucky and Indiana have been rising since January, and they still haven't dropped.

The average in Kentucky of $2.68 and in Indiana of $2.83 are more than 75 cents higher than they were back in the winter. But a slow surge has far-reaching origins.

Louisville-area gas prices plunged from the $2.90 ballpark to below $2 a gallon in a matter of just about three months in late-2018, and it all had to do with a threat from President Donald Trump that was never followed through on. Dan McTeague, the senior petroleum analyst with Gasbuddy.com, said oil-producing countries beefed up their output when Trump threatened to clamp down on Iran.

"Everyone started to oversupply and produce a lot of oil based on the assumption that there would be a massive shortage if the United States had proceeded with sanctioning, a complete sanction, of all Iranian oil exports," McTeague said

But just before the Nov. 6 deadline, the Trump administration backed off its threat, leaving the world with an excessive supply of oil, and the prices started dropping like a brick.

However, that didn't last long. 

"OPEC won't get fooled again," he said back in January. "It's decided to cut back production 1.2 million barrels. Canada's doing the same thing: 325,000 barrels of heavy oil, much of that going to the U.S. Midwest."

McTeague also said talk of the U.S. and China cooling off their trade war and the economies in China and Europe improving could also create more demand for oil and push prices even higher.

So prices settled above $2.50 after spring break and have stayed their since, poised to remain that way as summer begins.

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