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Gas Prices Under $2.00 by Christmas?

When is the last time you saw gas price signs showing a number below $2.00 mark?  It's been so long and I cannot recall whether that was this century or the 90s.

Looking at the historical chart of per gallon gas prices, it was 2004 when the average price per gallon broke through $2.00.  Then we saw a sharp drop of gasoline to go under $2.00 in 2008 during the bursting of housing bubble.

There is no doubt that this will bring a happy holiday season for many travelers and commuters. The national average for a gallon of regular gas is now down to $2.77. Wholesale prices for U.S. crude oil are down 38 percent from June, and expected to keep dropping, but not for a good reason.

The analyst at GasBuddy commented, "We could see the cheapest 1 percent of stations get within a few pennies of $1.99 over the next two weeks," and added "We'll see at least one station in the nation at $2 by Christmas. And that's not really a prediction at all. That's more like a certainty."

Last Friday, OPEC said it will keep producing, even though supply is exceeding demand right now. OPEC lead by Saudi Arabia is intentionally trying to drive the price down to force shutdown of shale gas industry.

"We've seen increased production by U.S. producers, and that's good news for the United States. On the other hand, it really is threatening OPEC's grip on the world oil market," said Dempsey.

Dempsey says the costs associated with producing petroleum via hydrolic fracturing in the U.S. are much higher than the costs of extracting oil in OPEC's member nations.

Hopefully, this does not lead to a sudden spike in gas price 6 months down the road.

Gas Prices Under $2.00 by Christmas? Reviewed by Brandon on 8:36 PM Rating: 5

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