News from the Oklahoma Corporation Commission

Jim Palmer, Director of Information

June 16, 2000

To schedule an interview regarding this news release contact Commissioner Denise Bode’s office at 405-521-2822

(OKLAHOMA CITY) It does not appear there are any quick and easy answers to this question because of its complexity but one primary reason found in the history of gasoline prices is "supply and demand." At this time, supplies are low and demand is increasing.

A common denominator in the price of gasoline at the pump is OPEC and its ever increasing flow of crude oil to America. American Petroleum Institute (API) figures for May 2000 reveal crude oil production from the lower 48 states and Alaska has dropped 1.7 percent during the past year as foreign imports of crude have jumped 2.1 percent. This means the U.S. is importing more than 56 percent of its oil. The API reports crude oil inventories dropped 12.4 percent in May from the same period last year. At the same time, API figures show an increase in gasoline production and deliveries which means a hike in demand.

Key factors in demand and higher gasoline prices at the pump:

1. Higher crude oil prices for more imported oil
2. Lower crude oil inventories
3. Significant pipeline disruptions cause slowdowns and shortages.
4. Increased summer driving and more gas guzzling sport vehicles
5. Higher Chicago area prices can draw gasoline from Oklahoma and increase local prices.