NEW YORK -- The U.S. is increasing its oil production faster than ever, and American drivers are guzzling less gas. But you'd never know it from the price at the pump.
The national average price of gasoline is $3.69 per gallon and forecast to creep higher, possibly approaching $4 by May.
U.S. oil output rose 14 percent to 6.5 million barrels per day last year -- a record increase. By 2020, the nation is forecast to overtake Saudi Arabia 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.
But 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 U.S. 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 per day last year.
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. On average, the price of crude is responsible for two-thirds of the price of gasoline, according to the Energy Department.
---Refinery shutdowns. Refineries temporarily close 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.