Gas Prices – When Will They Bottom Out?
America is witnessing something they haven’t seen in quite some time: gas prices that have dropped below $2 a gallon in some areas, with the average price of gas down 40% from summer’s record high levels. Cheap gas has returned, giving real relief to tens of millions of drivers – but are these prices sustainable?
The drive to lower gas prices has come suddenly and forcefully. Just one month earlier gas was retailing for a dollar a gallon higher than current rates, however the trend toward lower prices was already being felt. Mid-season hurricanes slowed that process, but when previously cut gas lines were restored, prices quickly began to tumble.
Under Two Dollars A Gallon
The lowest prices currently can be found across America’s mid-section, from the Ohio Valley down through the plains and all throughout the oil producing state of Texas. Indeed, a recent survey of pump prices via GasBuddy.com has revealed that stations in Corpus Christi, Kansas City, Oklahoma City, Des Moines, Dayton, and elsewhere are selling regular gas for under two dollars a gallon, the lowest prices some people have seen in three years.
Driving pump prices lower is the cost of a barrel of oil. Last summer, oil prices spiked, peaking at $147 a barrel, sending gas prices above $4 a gallon, even above the $5 level in some areas. Demand, speculators, and OPEC were all blamed for the rise, but it appears that the downturn in the global economy is the most significant force in driving lower gas prices today.
OPEC Cuts Production
Though OPEC recently met to cut production, oil prices dropped an additional ten percent despite the cartel’s desire to stabilize prices. This could mean one of two things: prices will continue to fall naturally, perhaps as low as $1.50 per gallon before stabilizing. Or, OPEC will make an emergency declaration and cut back production again which will quickly halt the slide. Regardless, the worldwide recession has curbed demand, sending prices downward.
Ultimately, no one knows where the bottom is with gas prices, but you can bet most drivers are glad to find some relief at the pump. With the economy going through its own gyrations, lower prices are being welcomed, giving consumers a much needed breather after a summer of painfully high prices.
Copyright 2008-2012 — Matthew C. Keegan is the owner of a successful writing and marketing business based in North Carolina, USA. He manages several websites and is a contributing writer for Andy’s Auto Sport, a retailer of quality Chevrolet Beretta Lambo doors and Chevrolet Beretta mufflers.
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