CONTINUOUSWAVE

A few days ago I filled the 42-gallon tank of my GMC Suburban at a retail hihgway gas station selling Unleaded Regular grade for $1.95-per-gallon. (I had a $0.50 discount earned credit, so I actually only paid $1.45-per-gallon.) As I travelled, I saw a few signs along the Interstate highway advertising gasoline for as little as $1.89-per-gallon. These low prices on highway gasoline are just amazing.

I believe there is a bit of geo-politics at play in these low prices. Producers in the Middle East are selling crude oil below market prices to drive down the price, with the intention of eventually forcing out other producers with higher production costs. When the Saudi's and other low-cost producers have achieved this goal, they can then resume their cartel and control the market price. At least, that's the sinister point of view.

Another factor may be the change in refining of gasoline to winter blends, which are said to be less expensive to manufacture.

While all of those global forces are working this out, it is quite a bonus to enjoy gasoline prices lower than anything we've seen in years. It is just too bad the boating season is over in the Great Lakes. I could really enjoy burning off a boat-load of $1.89 or cheaper fuel.

Jim you are right I just filled up my Highlander with (non-ethanol infused) regular Shell gas for $1.699 here in Kalamazoo. They were still charging $0.45 more for Super-grade.

The bottom line is still fine.

Most of this decrease is due to two main reasons:

--the U.S. is pumping a lot more crude due to the new Fracking technology and Oil sands extraction, and

--the global economy is down, especially China, so demand is down.

Between these two things oil inventories are at the highest levels ever. Sarah Palin had it right: Drill Baby, Drill!

You guys are killing me, here in the UK $6.40 is the cheapest you will find a US gallon of gas and a bit more for diesel so to fill we are looking a $140 to fill the 20 gallon tank on my Grand Cherokee.

Adding to your sinister plot theory--driving the price of gasoline down puts pressure on the Russian economy, curtailing their ability to make mischief on the international stage. The downward trend in gasoline is really probably a by-product of the glut of natural gas (which Russia uses as an economic lever on its European neighbors.) Either way, manipulating supply of commodities is probably a much better option than launching cruise missiles or supporting an occupying force. And in this case, it is good for boating.

Here in Southern Alabama prices vary by municipality as each taxes fuel at their own rate. In my area we are paying $1.90 at Murphys (Wal-Mart). My credit card provides a 5% rebate on fuel so my cost is $1.805. In the southern part of our very large county fuel runs about $.05 less. When I was a teenager in the fifties and our stations were having price wars we could pay as little as $.17 per gallon. I wonder how the price in 1957 compares to now when inflation is factored in.

It's almost disappointing that our consumption of fuel is far less than when I was on active duty.

John is correct, supply and demand determine price in the free market. The Goverment does not help because they screw around with supply by requiring special blends in certain areas at certain times. One type of fuel that could be sold in any State at any time would really help the supply side.

John

I just paid $1.75 per gallon to fill my GMC Yukon XL in NJ. A couple of weeks ago it was down to $1.67! I heard some predictions on the radio that it will be down to $1.50/gal by Christmas! At $50 or less to fill my 30 gal tank,'I've decided to hang on to my Yukon for a while longer. Having all the extra room and tow capacity is finally affordable, until they raise the gas tax.
Brian

A guy in the refinery businesss told me consumption now is about the same as 1990. Don't know how true that is.

Masbama,

I can believe National consumption is at 1990 levels due to the very large efficiency gains over the past 25 years. On a global scale I suspect consumption may have increased due to countries like China and India joining the massive vehicle ownership club.

Best price in Juneau is $3.35 for gas and $3.18 for diesel. Diesel was fluctuating the last few months between $3.17 and $3.20... are you kidding me? A 3-cent range?

Just for talking purposes, let's say your average American drives 18,000 miles a year. If gas is costing you $1.50 less than it used to, you are saving $1500 per year, or $125 per month.

That's about as good as almost any federal tax cut I've seen in my lifetime.

Funneling that much money back into consumers pockets should give the economy a boost.

On the flip side, layoffs by the thousands are rampant in Houston. Hard for any company to weather a 50% reduction in their revenue stream, even oil companies.