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NEW YORK — The United States is increasing its oil production faster than ever and U.S. drivers are using less gas. But you'd never know it from the pump price.
The national average price of gasoline is $3.69 per gallon, and it is forecast to approach $4 by May. For the year, prices are forecast to average $3.61 a gallon, slightly lower than last year's record average of $3.63.
In the Toledo area Thursday, the average price was $3.807 according to price-tracking service GasBuddy.com..
U.S. oil output rose 14 percent to 6.5 million barrels per day last year — a record increase — and the nation is forecast to overtake Saudi Arabia by 2020 as the world's largest crude oil producer. At the same time, U.S. gasoline demand has fallen to 8.7 million barrels a day, its lowest level since 2001, as people switch to more fuel efficient cars.
U.S. drivers are competing with drivers worldwide for every gallon of gasoline. As the developing economies of Asia and Latin America expand, their energy consumption is rising, which puts pressure on fuel supplies and prices everywhere else.
The U.S. still consumes more oil than any other country, but demand is weak and imports are falling. That leaves China, which overtook the United States late last year as the world's largest oil importer, as the single biggest influence on global demand for fuels. China's consumption has risen 28 percent in five years, to 10.2 million barrels a day last year.
U.S. refiners are free to sell gasoline and diesel to the highest bidder around the world. In 2011, the United States became a net exporter of fuels for the first time in 60 years. Mexico and Canada are the two biggest destinations for U.S. fuels, followed by Brazil and the Netherlands.
Two other factors are making gasoline expensive:
● High oil prices. Brent crude, a benchmark used to set the price of oil for many U.S. refiners, is $108 per barrel. It hasn't been below $100 per barrel since July. On average, the price of crude is responsible for two-thirds of the price of gasoline, according to the U.S. Energy Department.
● Refinery shutdowns. Refineries temporarily close down in the winter, when driving declines, to perform annual maintenance. That lowers gasoline inventories and sends prices higher nearly every year in the late winter and spring.
Rising gasoline prices act as a drag on the economy because they leave less money in drivers' wallets to spend on other things.