USA Today posted an article yesterday about gasoline prices. I just got back from California where the price of a gallon of gas was about $4. It’s really good to be back in North Carolina!
The article reports:
Gas prices are expected to plunge sharply in the final days leading up to the midterm elections, potentially nearing $2 a gallon at some stations in low-tax states.
The sudden respite at the pump comes from sharply lower oil prices and declining wholesale gasoline prices.
Oil Price Information Service analyst Tom Kloza said it could amount to a “colossal collapse” in prices for consumers: from a $2.78 national average on Friday to as low as $2.50 by Tuesday.
“There’s the possibility you could see some prices flirt with $2 a gallon in the next 10 days or so in some of the low-tax areas,” Kloza said. “For now it’s going to be a great break.”
The break comes after gas approached four-year highs in October, topping a national average of $2.90 a gallon at one point.
Prices have already fallen by 6 cents per gallon over the last week, according to AAA. But they remain 27 cents higher than a year ago.
The increase in gasoline prices was one of the factors in the housing bubble collapse in 2008. In four years, the price of a gallon of gasoline had gone from an average of $1.85 a gallon to an average of $3.25 a gallon. If you commute thirty miles to work, that could mean as much as $3.00 a day added to the cost of your commute plus the cost of any recreational driving. To some people working with a tight budget, the increase was the difference between being able to pay the mortgage and not being able to pay the mortgage.
The article continues:
U.S. oil prices have fallen about $13 per barrel from their October high, trading at around $63 on Friday morning.
One key reason: Rising oil production throughout the world is causing stockpiles to build up.
The Organization of the Petroleum Exporting Countries’ output has reached a two-year high, with leading OPEC member Saudi Arabia’s output “near its all-time high,” Jefferies analyst Jason Gammel said in a research note. American oil output has also spiked.
“This surge has driven the market into oversupply,” pushing prices lower, Gammel said.
A decrease in gasoline prices is good news for all consumers.