Early Thanksgiving: Gas Goes Below $2 a Gallon
With the holiday coming, there is a big reason to give thanks after all. Consumers can celebrate that gas has dropped below $2 for the first time in years. That marks a fall of more than 50 percent since July 15 when gas hit a high of $4.11.
The current nationwide average is just $1.989, according to the Oil Price Information Service. That price has been falling steadily since its high. Gas dropped below $3 a gallon for unleaded regular just a month ago on Oct. 20 and below $4 on July 28.
The price drop is even more remarkable when compared to previous years. Gas was $3.087 a year ago. In 2006, it was close to its yearly low on this date, hitting $2.233 per gallon.
The decline in gas has mirrored a similar drop in oil prices. Oil hit its high at $147 a barrel on July 11. Yesterday, it closed at $49.42, âthe lowest since May 2005,â according to Bloomberg.
âThe International Energy Agency, an adviser to 28 nations, said last week that world oil demand will rise at its slowest pace for 23 years in 2008. It cut its 2009 estimate by 670,000 barrels a day to 86.5 million barrels a day, the biggest reduction in 12 years,â Bloomberg added.
The Oct. 14 âWorld News with Charles Gibsonâ reported falling gas prices and finally told viewers its own forecasts of prices soaring even higher in the short term were incorrect.
âThere is good economic news to report tonight that affects almost every American,â anchor Charles Gibson said. âIt is the price of gas, which fell dramatically â down 33 cents a gallon in just the past week to a nationwide average of $3.15 a gallon. Thatâs almost a dollar lower than the high of $4.11 a gallon in July. The 33-cent price drop represents a savings to American drivers of about $125 million every day. The reason for all of this â Americans are driving less.â
âDemand for oil has been falling sharply month after month,â Alfonsi said. âJust this summer, there was talk of $5 a gallon. Not anymore.â
As far back as two years ago, NBC was also talking about $5 gasoline. On the May 20, 2005, âToday,â reporter Carl Quintanilla asked the audience to picture a scary future. âImagine a world with $5 gasoline. What would you do?â he asked.
This year those predictions grew louder. Robert Hirsch, Management Information Services Senior Energy Advisor, gave a dire warning about the potential future of gas prices on CNBCâs May 20 âSquawk Boxâ. He told host Becky Quick that the problem was so enormous no single thing would solve it.
â[T]he prices that weâre paying at the pump today are, I think, going to be âthe good old days,â because others who watch this very closely forecast that weâre going to be hitting $12 and $15 per gallon,â Hirsch said. âAnd then, after that, when oil â world oil production goes into decline, weâre going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, weâre not going to be able to get the fuel when we want it.â