Crude Oil Resumes Fall, Gas Under $2 in Some Locations

After rebounding slightly yesterday, the price of crude oil resumed its downward trend today, losing $.75 to close at $63.22.  The major reason for today’s losses can be attributed to an unexpectedly large rise in U.S. natural gas inventories.

This rise in natural gas reserves caused natural gas futures to fall nearly 10% to close at two year lows at $4.89 per 1,000 cubic feet.

In turn, the average price of a gallon of regular unleaded gasoline fell to $2.54 per gallon, with many locations reporting prices much lower than that.  One such location is outside of Cleveland, OH, where some stations are selling gas for as low as $1.93 per gallon.

And then there is California, where prices just fell below $3 per gallon for the first time since April.

It amazes me how two nearly identical “items” – in this case, a gallon of gas in Cleveland vs. a gallon of gas in California – can sell at a 50% premium in one location.  I know California has higher gas taxes and stricter regulations, but something about this scenario just doesn’t seem right.

Comments

  1. Due to California gas being a different formula then gas made for Ohio, that causes the price difference. You can blame the enviornmentalists in the state of California for the high cost of their gas. If it wasn’t for their wacky requirements, they too would have $1.93 gas.

  2. I understand about California’s regulations, but it just seems silly that the regulations would cause a gallon of gas to cost $1 more.

    I suppose if I had to choose between paying $1 more or having to worry about smog, I’d choose to pay more for gas.

  3. Steve Baxter says

    Yes, it seems “silly” but it’s the case. It’s almost, though not quite, apples and oranges. It also may seem silly that the beer in one can will cost a dollar, and another will cost five. They’re both just pints of “beer.”

  4. A Californian says

    Those “wacky requirements” are an attempt to keep air pollution reduced in a state that already has excessive amounts of bad air quality days. Blame those damn environmentalists for trying to keep everyone from choking on smog and getting asthma. What a bunch of thoughtless morons for trying something so ridiculous. And that said, the requirements for a different formula of gas do NOT justify a 50% premium on the price.

  5. You’re suprised at a 50% price difference between an item purchased in California and one purchased in Ohio?! Have you been living under a rock? EVERYTHING is more expensive in California 🙂

  6. Ohio gets cheaper gas for giving Bush the election. Twice.

  7. When you compare the map of national gas prices
    Columbia Gas Prices

    With the chart of republican senate seats in jeopardy
    Rasmussen Reports

    Then throw in the prudhoe bay oil production cuts and you have your answer.

    Remember very blue state and very red state are not easily influenced so only swing states matter.

    Also this graph is informative. It plots presidential approval ratings verse the reciprocal of gas prices.
    Graph

  8. Interesting stuff.

  9. A Washingtonion says

    Not just California, here in Washington gas is still above $3.00.

  10. here in florida ive seen $2.29 for regular.

  11. First of all I live on the other end of California (yes there is more to California than LA, San Diego, & San Francisco). Here in the redwoods we don’t have smog & yet we consistently pay more for gas than Southern California does. We’ve been hearing the “reasons of justification” for years. Let’s face it it’s all about the $$$$$$$. Normally California gas does cost more, but nothing like the difference we currently have.

    Also remember the oil companies have posted record profits this year. Yes barrels of oil have been selling at a higher price, but when you do the math their excuses & profits don’t add up.

    Back to the subject….I paid $2.99 a gal Monday for UL & that price really has nothing to do with California having additional requirements for their gas. It’s all about the $$$ & how far they can bend you over the “barrel”.

  12. Well, Anon. Since Ohio is a gross exporter of acid rain, perhaps you should button your lip and campaign for more stringent environmental regulations.

  13. I’d rather live in California and pay $3/gallon, than live in FL or OH and get free gasoline. Maybe it’s just me….

  14. atomic cow, no you wouldn’t 🙂

  15. Atomic Cow hit the nail on the head…

  16. AUSSIE SANDMAN says

    I live on the Gold Coast, Australia. we just had a bit of a price drop down to AU$1.03 a ltr, which when you work it out comes in at US$2.89 a gal. i dont know how bad its been over there but just last week i paid the equivelent of US$4.20 a gal

  17. Redwoods vs. San Fran says

    Ok, look a little closer still. My mother lives four hours away and pays 35 cents a gallon less than I do. They blame it on the “redwood curtain” but really it’s more about the oil monopoly in smaller areas. As some have said though, I’d rather live four hours away and pay 35 cents/gal more than live in the crowded polluted bay area where i grew up.

  18. i live in cleveland. That was an isolated price. Most of us in the area are still $paying 2.50. For all you bush blaming idiots it’s called zone pricing. I watch “flip that house” or whatever it’s called on TLC and see you west coast idiots paying a half million dollars for a piece of shit house out there. A seller(gas or whatever) will take what you are willing to give. I’ll pay my 2.00 for gas. Live in my new 3000 sqr foot house($250,000 vs 1.9 milion if it was in Ca) And use the money i save to come visit your sorry asses when it gets cold here. Ha Ha suckers.

  19. I do not believe this

  20. You might want to check the date.

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