Professor Sherry Jarrell Comments on Rising Gas Prices

2.23.2011 Faculty News, General, News Release

WINSTON-SALEM, N.C. (WGHP) — Unpleasant memories of the "pain at the pump" during summer 2008 are beginning to creep back into the minds of Triad drivers.

Triple-A said gas prices in the Triad are now averaging $3.11 a gallon, up from $2.59 during the same time last year.

At one gas station, FOX8's Brent Campbell said he saw the price increase from $3.15 to $3.25 in just 10 minutes during the evening rush Wednesday.

Oil prices briefly hit $100 a barrel Wednesday, its highest point in two years. Experts believe prices have not hit their plateau yet and will continue to rise.

"We should not begrudge the local gas stations. They don't set their prices," said Dr. Sherry Jarrell, Wake Forest economist.

Despite sounding cliche, Jarrell said the root of the higher gas prices is America's dependence on foreign oil. Unrest in the Middle East, espcially Libya, should be watched closely, Jarrell said.

"I think they are in a very powerful position to threaten and then follow through on really restricting our supply of oil–for political reasons if nothing else. If we anticipate that the supply is going to be disrupted unexpectedly in next two weeks, which is the case, it makes sense that the price start moving now," Jarrell said.

However, in terms of individual countries, Department of Energy statistics show the United States imports the most oil from Canada. Nearly 2 million barrels of oil are imported from that country daily.

Mexico is the second-largest source of imported oil, with just over 1 million barrels. Saudi Arabia is the third biggest, with just over 989,000 barrels imported daily. More than 19 million barrels of oil are consumed every day in the country.

The Middle East has, by far, more oil reserves than any other region in the world, which is why oil prices often increase when there is unrest in the region, Department of Energy studies show.