AP analysis: More U.S. drilling didn’t drop gas prices

It’s the political cure-all for high gas prices: Drill here, drill now. Or maybe not. According to a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production, presented by The Associated Press, there’s no statistical correlation between how much oil comes out of U.S. wells and the price at the pump. According to the analysis, if more domestic oil drilling equated to a reduction gas prices, as politicians say, you’d now be paying about $2 a gallon for gasoline. Instead, you’re paying the highest prices ever for March. U.S. oil production is back to the same level it was in March 2003, when gas cost $2.10 per gallon, when adjusted for inflation. Sometimes prices actually increase as American drilling ramps up, as has happened over the past three years. Since February 2009, U.S. oil production has increased 15% when seasonally adjusted. But average prices in those three years went from $2.07 per gallon to $3.58. It was a case of drilling more and paying much more. That’s because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline. If drilling activity rises around the globe for a sustained period of time, gasoline prices can fall as that new supply eventually finds its way to market, but the United States can’t do it alone, oil analysts say. Check out the full story for much more analysis here.