Gas Prices Plummeting
Gasoline prices are falling fast and could keep dropping for months. “The only place they have to go is down,” says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). “We’ll be closer to $2 than $3 come Thanksgiving.”
And just in time for the fall elections, too!
I blame Bush. Or Rove. And Halliburton is mixed up in it somehow. Whomever–it’s a Republican conspiracy.
Either that, or just the market at work.
•The end of summer. Driving slows, reducing demand for gasoline. And federal requirements for clean air, summer-blend gasoline end next month, making gasoline cheaper to refine and import.
•Sluggish demand. Gasoline use in the first eight months of the year is up 1% vs. a year ago, less than the 1.5% to 2% growth that’s typical, says Michael Morris, analyst at the U.S. Energy Information Administration. “Wholesalers are trying to get rid of product. The growth in demand for gasoline has really tapered off,” he says.
Wholesale prices are falling faster than retail gasoline prices, meaning stations are making more money than when prices were $3. Wholesale prices Tuesday ranged from $1.77 to $1.79 a gallon, well below the $2-plus prices typical until recently.
•Petroleum traders, worried that prices are too high to last, are selling their holdings. That pushes prices down. They also believe hurricanes won’t disrupt Gulf of Mexico production, OPIS senior analyst Tom Kloza says.
Crude oil, which accounts for roughly half the price of gasoline, ended New York trading Tuesday down 90 cents, at $69.71 a barrel. That’s the first time it’s closed at less than $70 since May 4.
That’s pretty complicated, though. I’d go with Bush-Rove-Halliburton.
UPDATE: Steven Taylor reports that it’s down to $2.6something in Alabama. I paid $3.19 in Alexandria, Virginia yesterday for 93 octane; I believe regular was $2.89.