- Posted June 22, 2012 by
Gas Price to Drop Under $3 By Fall!?
Experts are saying that gas will be under $3 by the fall. Though our pain at the pump may be much lower than now, it's not good news. It indicates that the nearly stalled US and global economy are only going to get worse.
There are a few locations throughout the nation that have enjoyed under $3 gas for the last couple of weeks as I noted in my weekly National Gas Prices - A Snapshot.
Those states this past Monday were:
Alabama, Arkansas, Mississippi and South Carolina.
The darkening clouds of the slowing economy could provide a bright spot for consumers: gasoline at $3 a gallon — or less — by autumn.
Nationally, regular gasoline averages $3.47 a gallon, down 47 cents from this year's high in April and well below the $5-a-gallon fears fanned earlier this year by energy speculators, Middle East tensions and oil refinery glitches that crimped supplies.
Those issues appear to be over, at least for now. Thursday, benchmark West Texas Intermediate crude oil fell 4% to $78.20 a barrel, the lowest price since early October and off 20% year-to-date. Coupled with slumping wholesale gasoline contracts for fall delivery, "the market is suggesting gas below $3 by Halloween, and certainly by Thanksgiving," says Tom Kloza of the Oil Price Information Service.
With production up, oil inventories at 21-year highs and tepid consumer demand, gas prices have fallen for 11 weeks. They're expected to drop more sharply after the peak summer driving season.
"Demand just isn't there," says Brian Milne of energy tracker Televent DTN, noting an Energy Department report that demand for fuel over the past four weeks has fallen 5% below year-ago levels. "It's been dreadful."
Barring supply disruptions heading into hurricane season — which helped drive pump prices to an all-time $4.11 high in July 2008 — consumers could soon be filling up at prices not seen since December 2010.
How will this play out in presidential politics?
Even though Americans will be feeling less pain at the pump will the downturn in the economic picture offset any optimism over low gas prices?
Will this make getting re-electing more difficult for President Barack Obama?
Will lower gas prices help or hinder presumptive Republican presidential nominee Mitt Romney?
From the Cornfield, while I welcome gas cost going down, I do not welcome the downturn in the US and global economy which pushed the price down.
This just means substituting one pain for another.