Great news! I heard an interview on the radio today with a fuel pricing expert. International gasoline demand is very low, and since this is a result of large economies in trouble, gasoline prices should continue to drop, and will eventually average below $2.00 per gallon! I’m stoked. As corroboration, OPEC acknowledged in a recent meeting that they see continually decreasing demand for their product with no end in sight. Saudi Arabia won’t aid OPEC since they really don’t have any political allies in OPEC a anymore, and lower oil prices would destabilize most of their foes in the Middle East. OPEC needs Saudi Arabia, not the other way around. The downside for our economy is that shale oil will become too expensive to extract with oil less than $60/barrel. But those losses are small change compared to the over $1 billion saved in gasoline costs. BTW, the USA economy is not one of those in poor shape. This is more a problem for China and other Asian economies. Are you excited, too? Uh oh, I think I hear Major Bummer coming with a comment…
still 2.70 here…
I think it was around $2.58 a day or two ago here. The folks in the Bakken field claim they can withstand quite a bit lower prices yet and still be ok. Already the conspiracies abound with Mexico thinking we are trying to ruin them and Russia and Iran. Who knows? I think its interesting though to watch how prices can’t be controlled on the down side when we thought they were controlling them on the upside. Maybe it really is a world market?
Saudi Arabia wants to reduce the US shale oil production. Low prices are already reducing 2015 plans. Wells already drilled won’t be affected, though.
$2.23 per gallon at Costco today, with “regular” retailers charging 20 to 40 cents more in many areas.
On a related note, I listened to a discussion on Bloomberg Radio today regarding the “fallout” of plummeting fuel prices, and they include…lower food costs…lower costs for minerals…and, of course, lower costs for the airlines. However, the airlines continue to profiteer with their nickel & dime fees, so rather than passing along their savings, the airlines are making money hand over fist.
It’s $2.50 at some stations around here, but most are still higher. Patience Grashopper. Oil continues to fall in price, and with that, gas will drop, too. I think the guess was that we’d approach $2.00 by summer. MD has a high and increasing gasoline tax, so there is a floor higher here than in other states with lower fuel taxes.
$2.28 at Quick Trip, diesel’s like $0.90 more…no way I’d get one.
oil was at 62 something/barrel this morning
I’m a bit torn on the issue. I’m in favor of low gas prices up to a point. It’s 2.28 here; all fine and well IMO although I wouldn’t complain if it hit 2.00.
The downside is that with lowered gas prices oil production also slows a bit. That every other month oil and gas royalty checks I get due to slant drilling has shrunk a bit also.
@jtsanders: Airlines typically buy all their fuel at prices agreed to in advance. This protects them from price fluctuations, but ensures they only reap minimal gains, unless prices stay low. For a good long while.
@meanjoe75fan - some do it that way, but others are more short term. Southwest for one, I think, so they are seeing a big drop in costs. More here:
@meanjoe75fan, that’s one reason why Southwest Airlines was able to grow quickly. They had fuel contracts long enough to guarantee low prices longer than other airlines did.
American Airlines quit ‘hedging’ in July, they’re seeing the full benefit of the price drops:
Hedging is the word i was looking for. Southwest was particularly good at that when it was necessary.
I paid $2.54 yesterday for regular in SE Wisconsin.
But you know what will happen.
Two big wigs at the corporate offices will walk outside tomorrow and have a smoke. As a worker walks by, he will drop his empty Snickers wrapper into the ashtray on top of a smoldering cigarette butt. It will smolder for a minute until one of the two big wigs notices and pours about an ounce of coffee over it.
The two will look at each other and exclaim “We had a refinery fire…raise the prices.”
All of a sudden, buying a truck that averages 18 mpg hasn’t been too bad a thing. Now, if it could just stay down for ten more years…
I just had a shock at my local Speedway. They were adjusting the fuel prices and regular came down to $2.41 which was almost the same price as E85 ($2.38). If regular ever goes below the price of E85…they won’t be able to give the stuff away.
The lower gasoline prices also kind of blows those cost saving estimates with hybrids and electrics out of the water.
I wonder if one could get a good deal on a Prius, new or used. I got rid of my Ford Focus 7 months ago and have been driving the big CUV for my daily driver and at the meantime trying to find a commuter car for cheap. The CUV gets ~22 mpg and at this point it seems it is not even worth having the extra car for gas savings.
A lot of times I tend to buy contrary to what the latest market trend is. Just because I tend to buy what I want or need without extreme concern for the mpg. Things turn around in a year or two usually. Low gas prices are a two edged sword though. Its going to take a long time to make up what I lost in the market the last couple of days through gas savings. Mainly looks like the energy sector is having a bad time and pensions etc. have money in the energy sector.