The equilibrium price and quantity occur where the supply and demand curves intersect, at point E. At the equilibrium price of $1.40, the quantity demanded equals the quantity supplied at 600 million gallons. There is no pressure for the price to change.
At an above-equilibrium price like $1.80, suppliers want to sell more than consumers want to buy, creating an excess supply (surplus). The surplus bracket on the graph shows the gap between supply and demand quantities. Competitive pressure from unsold inventory pushes the price back down toward equilibrium.
At a below-equilibrium price like $1.20, consumers want to buy more than producers are willing to sell, creating an excess demand (shortage). Consumers competing for scarce goods push the price back up. This self-correcting mechanism is the invisible hand of the market driving price toward equilibrium.