Q:

What factors affect annual gas price averages in the United States?

A:

Quick Answer

Gas price averages in the United States parallel the fluctuations in domestic and international crude oil prices, as the American Petroleum Institute states. Crude oil prices are affected by factors such as supply and demand, the strength of national and international economies, exchange rates, war, and natural disasters.

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Full Answer

Crude oil prices are determined in the global market, according to the American Petroleum Institute. When the U.S. economy is weak, as was the case in 2008 to 2009, there is lower demand for gas. In this scenario, the supply is greater, and gas prices begin to fall. Conversely, increased demand and lower supply cause gas prices to inflate.

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