Where Will Gas Prices Bottom Out?

November 3, 2008 by 11 Comments

Over the past four months, we’ve seen an unprecedented decline in the price of gasoline.  After hitting its record high of $4.12 on July 14, the national average price of gas has fallen over 40%, and now stands at $2.40 per gallon.

The last time gas prices were this low was back in March of 2007 – or roughly 20 months ago!

With these being pretty tough economic times, this recent decline in prices is certainly welcomed by many Americans.  That being said, I think I speak for many of us when I say that I certainly wouldn’t mind gas prices dropping a little bit further.

This of course begs the question, where are gas prices going from here?  Are we going to end up with sub-$2 gas for the first time in four years, or have prices finally bottomed out at the current levels?

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National Average Gas Price Continues to Fall – Now at $2.40 per Gallon

November 3, 2008 by Leave a Comment

The national average price for a gallon of regular unleaded gasoline now stands at $2.40 per gallon – a price not seen since early March 2007.

Gasoline prices are now down nearly 42% from the record highs set back in mid-July of this year.  Over the past month, the price of gas has fallen by nearly 33%; even over the past week, it’s fallen over nine percent.

In fact, prices have fallen so far, that today’s average price is 13% below what it was exactly one year ago.

There are only two states reporting an average gas price above $3 per gallon: Hawaii at $3.61 and Alaska at $3.32.  Currently, 34 states plus Washington, D.C. are reporting an average price below $2.50 per gallon, with Oklahoma reporting the lowest average price at $2.01 per gallon.

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Gas Prices Fall to Lowest Levels in 19 Months

October 29, 2008 by 4 Comments

For the first time since April 2007, the national average price for a gallon of regular unleaded gasoline has fallen below the $2.60 mark.  And from the looks of things, it appears as if there’s still plenty of room for prices to fall.

As of this afternoon, the national average gas price stood at $2.57 per gallon.  Over the past month, the price of gas has fallen nearly 30%, and is now down nearly 40% from the record high prices set back in July.

Gas prices are falling so quickly that they’ve lost nearly 10% over the past week, and have fallen so far that they are actually 8% below where they were at the same point last year.

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National Speed Limit to Help Save Gas? Not so Fast!

October 28, 2008 by 43 Comments

Remember the days of $4 gasoline?  Ah, they seem so long ago – even though it was less than three months ago.

Anyway, one of the many proposed ideas to help ease the pain at the pump and help drivers consume less gasoline was to implement a national speed limit, which would reduce the maximum allowable driving speed to top out at 55 miles per hour.

However, with all of the recent Federal intervention and meddling in an effort to revive the economy, one would imagine Congress has much bigger things to worry about.  Besides, do we really want the government to step in and impose even more regulations upon us?

According to a recent poll on GasBuddy.com, a vast majority of drivers are against a government mandated speed limit.

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Gas Prices Lower Than They Were a Year Ago

October 25, 2008 by 23 Comments

For the first time in what feels like forever, the price of gasoline is less expensive than it was exactly a year ago.

While this would usually be reason for joy, it appears that the major factor behind the significant decline in the prices of oil and gasoline is the rapidly deteriorating world economy.

Today’s national average price of gas stands at $2.73 per gallon, which is three cents below where it was exactly 12 months ago.  While $2.73 for a gallon of gas certainly isn’t cheap by any stretch of the imagination, it’s certainly a heck of a lot more affordable than what we dealt with for most of this year.

Since hitting a record high of $4.12 per gallon on July 14, the price of gas has fallen by over 33%.  Over the past month alone the price of gas has fallen nearly 25% – thanks to the credit crisis and fears of a very deep and painful recession.

Currently, there are only five states reporting an average gas price above $3 per gallon, with Alaska having the highest state wide average price at $3.60 per gallon.  Conversely, there are now ten states reporting an average gas price below $2.50 per gallon, with Oklahoma having the lowest state wide average price at $2.27.

In an effort to help stem the tide of falling oil prices – which are down nearly 60% from this summer’s record highs – OPEC has announced that it will cut crude oil production by 1.5 million barrels per day.  However, because this cut was less than the expected 2 million barrel per day cut, the price of oil fell about $3 per barrel after the announcement.

This likely means gas prices will continue to fall in the near term.  While this is good news for anyone with a car – additionally, this will effectively kill inflationary pressures – the trade off is we’re having to deal with the worst economy in decades.

Unfortunately, it looks like things are going to get a lot worse – higher unemployment, further declines in stock and home prices, and sinking corporate profits – before they start to get any better.

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Suck It, OPEC.

October 21, 2008 by 15 Comments

Apparently a lot has happened since my last post.

The stock, credit and housing markets have been in shambles; the price of oil has now fallen over 50% from its record highs set this past July; and the price of gasoline has dropped well below the psychologically important $3 mark.

As of this afternoon, the national average price of a gallon of regular unleaded gasoline stood at $2.88, which is about 30% below this summer’s peak prices.  Over the past month alone, the price of gas has fallen nearly 23%.  Additionally, the price of gasoline is now only 7% higher than what it was at this point last year.

Currently every state is reporting an average price below $4 per gallon, and there are only 13 states with average prices above $3 per gallon.  Hawaii has the highest state-wide average price at $3.77 per gallon, while Oklahoma has the lowest state-wide average price at $2.40 per gallon.

Unfortunately, this record price decline might be nearing an end.  The Organization of Petroleum Exporting Countries (OPEC) will be holding a meeting this coming Friday to discuss massive production cuts in order to protect oil prices.  It is widely speculated that OPEC will announce daily production cuts of between 1.5 million and 2 million barrels.

Given the world’s current economic state, it is very doubtful that this production cut will cause oil prices – and subsequently gasoline prices – to shoot back up towards their record highs.  However, it’s not unreasonable to expect prices to, at the very least, stay at their current levels or rise slightly.

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Price of Oil Down Over $10, Gasoline Prices Keep Dropping

September 30, 2008 by 3 Comments

Thanks to growing fears that the United States has entered a prolonged recession – with some saying we’re about to see the second Great Depression – the price of oil fell over $10 per barrel today and closed below $100 for the first time since last Monday.

Most of today’s market action – marked by the DOW’s single largest daily point drop, the S&P and NASDAQ both losing roughly nine percent and oil’s second largest daily price decline – came about thanks to Congress balking at the proposed $700 billion Wall Street bailout.

This bailout, which was agreed upon in principle Sunday evening, was meant to help restore confidence in the financial markets by having the Treasury Department buy hard to value mortgage backed securities from struggling financial firms in an effort to get them lending to each other, businesses and consumers.

In addition to the House’s vote, several European bank failures helped to push the dollar up against the euro.  As I’m sure you’ve come to find out over the past several months, a stronger dollar tends to push commodity prices lower.

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Economic Problems – Less Pain at the Pump, More Pain for you Everywhere Else

September 16, 2008 by 8 Comments

The price of oil fell sharply today, thanks to the collapse of investment house Lehman Brothers, and the growing concern that the United States is only in the beginning stages of a prolonged economic downturn.

After falling to as low as $94.13 per barrel, the price of oil closed the trading day at $95.71, which was down $5.47 from Friday’s close.  Today’s closing price represents oil’s lowest price since back in February, and means the value of oil has fallen nearly 35% since hitting a record high of over $147 back in mid-July.

Despite today’s drop in the price of oil, gasoline prices continued to rise across the country thanks to damage caused by Hurricane Ike.  While refinery capacity is slowly coming back up, at the height of the shut downs and evacuations, nearly 25% of the United States’ fuel refinery capacity was out of commission, causing gas prices to climb significantly higher for the first time in over two months.

WHAT DOES ALL OF THIS MEAN FOR YOU?

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Gas Prices Stagnate as of Late

September 10, 2008 by Leave a Comment

While the price of gas continues to fall from its record high set in mid-July, the rate of the price decline has slowed as of late.  Today’s price of $3.66 is down just 4% over the past month ($3.82) and down only a half percent over the past week ($3.68).

Even with the price of gas falling almost every day since setting the record high of $4.12 on July 17, the national average price of gas is still up over 20% from what it was at the beginning of the year, and is up roughly 30% from what it was 12 months ago.

Currently, every state but Alaska ($4.51) and Hawaii ($4.42) have an average gas price below $4 per gallon.  Delaware is reporting the lowest average price at $3.35 per gallon.

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Expect Gas Prices to go Down by the New Year? Don’t Count on it.

August 30, 2008 by 5 Comments

Despite the fact gas prices have declined for nearly a month and a half straight – falling from a record high of $4.12 per gallon on July 16, to today’s average price of $3.69 per gallon – according to a recent poll on Daily Fuel Economy Tip, roughly two-thirds of drivers believe we won’t see much more relief by the end of the year, if we see any at all.

The poll very simply asked, “What will the national average gas price be on January 1, 2009?” Here’s how over a hundred readers responded:

  • 66% believe gas prices will be in excess of $3.50
  • 17% believe gas prices will be between $3.26 and $3.50
  • 11% believe gas prices will be less than $3
  • 6% believe gas prices will be between $3.00 and $3.25

To put things in perspective, between 11 and 17 percent of respondents believe we will be paying less for gas on January 1, 2009 than we were on January 1, 2008, when the national average stood at $3.05 per gallon.

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