Gas prices rung in the New Year by continuing the downward plummet nationwide, even falling below $2.00 per gallon in many areas. AAA spokesperson Mark Jenkins predicts 2015 will be a year of big consumer savings at the pump because of the falling prices for crude oil. This makes for happy drivers but investors are not smiling at the devaluing of their investments.
As of Dec. 31, 2014, national average gas prices had dropped $1.06 over the Jan. 1 price one year ago, ringing in at the lowest price of the year. Gas prices began plummeting on Sept. 26 and continued steadily downward through year-end. The price continues to drop daily and now stands at 103 consecutive days of continued savings, each day better than the day before. From cringing every time they had to fill up the tank, drivers now have to ask if they can get by one more day before filling up because tomorrow is bound to be a better deal than today, if things continue.
After the long bout of gas prices edging upward towards $4.00 per gallon, many wonder why the sudden decline and worry about when it will end. U.S. oil production is booming, reaching its highest output in 30 years and OPEC refuses to cut production. The oversupply, decreased global demand and the fact that it comes from domestic suppliers rather than foreign, has drastically cut the price of crude oil which in turn drops gas prices. From highs of around $95 to $107 per barrel in June, a barrel of crude oil fell to $53.27 on Dec. 31, 2014, lower than the market has seen since May 2009.
Cheaper oil is good for the typical American family’s pocketbook and their freedom to travel and contribute to the economy but Wall Street investors are not as happy. The steady decline in crude oil prices without an end in sight was a primary cause in Monday’s falling DOW and S&P, according to analysts and traders. The declining value of their investments has investors on edge, worried about their returns if it does not recover soon.
As a result, states nationwide are experiencing plummeting gas prices. From a high national average of $3.70 per gallon for regular unleaded, many gas stations are advertising prices in the lower $2.00 range. Some are even breaching the long-standing low price barrier and falling below $2.00 for the first time in recent memory or even long-term memory for many people. As of Sunday, low prices ranged from $2.o5 to $2.31 in Florida, Georgia and Tennessee. The Idaho average is $2.13 with a gas station in Post Falls dropping as low as $1.95 and one in Plummer offering a fill up for $1.91 per gallon, same as the average price in Michigan. The low price in Maine was $2.35. The best deals in Washington County, Oregon are running between $2.09 and $2.14.
Drivers are amazed and enjoying it while they can. Many cannot remember the last time nationwide gas prices plummeted this low. One Idaho woman speculates that it has been twenty years at least. The declining prices mean drivers can afford to fill up more often and take more car trips. A 15-gallon fill up costs approximately $22.00 less than it did at the peak prices in April 2014. The U.S. Energy Information Administration (EIA) predicts that a typical family could potentially save about $550 on fuel costs in 2015 compared to 2014. All good things must come to an end sooner or later but the nationwide trend offers a ray of hope to financially strapped families beleaguered by the high gas prices the last several years and that is something to celebrate as the New Year kicks off its debut week.
by Tamara Christine Van Hooser
CBS KREM 2
Image courtesy of Andrew Mager – Flickr License