• Oct 10th 2008 at 6:32PM
  • 34
The US, and in fact the entire civilized world, is knee deep in a financial meltdown. However, crashing stock markets and crumbling banking institutions have led to one pleasant side effect. The price of gas is dropping faster than the NASDAQ. A quick trip through south-east Michigan shows that gas prices have dropped below the $3.00 threshold, and tumbling crude prices show that even cheaper petrol is on the way. A barrel of oil now costs $77.70, which is in stark contrast to the $147 per barrel crude in July that lead to $4.25 per gallon gasoline. That's a drop of nearly $9.00 today alone, and OPEC has scheduled an emergency meeting to try to halt the precipitous drop of black gold. And since we're paying under $3.00 per gallon for oil that was purchased last month, that means we won't bear the fruit of the recent drop in crude until November.
While many of you were with us in praying for this drop, it's coming at a huge price. Gas is becoming more affordable because a set of Texas-sized Brembos put the brakes on energy use, but at least it's cheaper. At this rate, if the get depressed about the economy, we can afford to go for a quick ride without having to take out another loan on our crashing mortgages.

[Source: CNN Money]

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    • 1 Second Ago
      • 6 Years Ago
      2 things come to mind:

      Autoblog: "Gas is becoming more affordable because a set of Texas-sized Brembos put the brakes on energy use, but at least it's cheaper. "

      Has energy use really tanked with the stock market? I doubt it. What has more liklely happened is that speculators have realized that the near future will use less energy as a result of the market and are betting accordingly.

      Also, I hate stories like this where everybody's ecstatic to be down 30% from 3 months ago, when we're still up 50% over 2 years ago (that's a seat of the pants guesstimate, sorry I don't have the actuals handy).

      Not too long ago, everybody thought the world would break at $50/barrel, and here we are sighing relief at ~$90 (and Opec is rushing to shore up the price to their newfound level of financial comfort). $3/gal is still ridiculous insofar as the cost of production (and risk) still hasn't changed from 1-2 years ago.

      My .02, IANAEconomist (obviously).

        • 6 Years Ago
        Someone with some Insight...

        I remember a video of a Chief on of of those plants looking at the dial of barrels... and in about 4s he said.. There goes my salary!

        • 6 Years Ago
        I hear that! I am not ecstatic that prices are still as high as they are. I remember reading an article the other day basically saying WTF? If you look at the price per barrel vs the price per gallon, we're getting hosed by at least 70 cents to the gallon compared to what it used to cost.
        • 6 Years Ago
        Just to bring in some actual facts to the conversation. I know that's such a bad idea, it really ruins the conspiracy theories.

        According to gasbuddy.com, 2yrs ago, the average price for Regular Unleaded gasoline was around $2.20/gal. At the same time, oil prices were around $60 a barrel.

        http://www.gasbuddy.com/gb_retail_price_chart.aspx You can choose to add in the overlay for crude oil prices as well, as I did.

        We have yet to see the full price drop, we are still in a relative free-fall.

        Doing a little math and making pure guesstimates, I think the current crude cost($78) would support gas prices of around $2.85/gal. I made that assumption using the 2yr old data. Oil prices are about 30% higher currently(78 vs. 60) and then added that same 30% increase to the cost of gas 2yrs ago. I know it's not a direct comparison, but it at least gives a little perspective. As virtually every industry expert has said, there is still a fair amount of decrease coming in gas prices.

        Nice to see prices falling though anyhow, stations near me are dropping about 5cents/gal. every day or two. Lowest I saw this morning was $3.11/gal.
        • 6 Years Ago
        somebody needs to tell charlotte gas prices are supposed to be tanking. its still 3.80 here
      • 6 Years Ago
      I wonder if folks who bailed on their nearly new Escalades and other SUV's to get fuel sippers, taking huge depreciation hits in the process, are having second thoughts?

      Actually look for prices to rise again as inflation (meaning dollars worth less) becomes a bigger factor in the price. The printing presses will be running day/night to try to reinflate the money supply and buy off angry voters with stimulus packages and such.
      • 6 Years Ago
      2.87 oh shizzel! where's that location? And a little over a year ago we was complaining gas price reaching 3 dollars not knowing it reached to 4 dollars in the same time period. Tsk Tsk, how time has changed.
      • 6 Years Ago
      Why the hell is gas so high in NC still? We had been the third highest in the nation for some stupid reason. I paid almost $4.00 for premium today, and I saw some places over $4.00 for premium when I was going to get gas. I saw a place over $5.00 the day Ike hit TX.

      • 6 Years Ago
      I hope this will increase the amount of driving back to normal levels.
        • 6 Years Ago
        Why, is it a bad thing that we were consuming less oil?

        And I don't think we're going back to "normal levels," I think that we're all going to be driving less until a real, viable, long term solution can be found.

        And really, the fact is, a gallon of gas was still dirt cheap in the US compared to the rest of the world, even when prices were knocking on $5/gal in july/august.
        • 6 Years Ago
        Dumbass comment but calling these prices "low" is still just as bad!
        $2.99 is not low! $2.49 is not low!

        $1.49 is low.

        $2.99 might FEEL low, but it's still way above what we SHOULD be paying.
        • 6 Years Ago
        Wow...you realize that gas is cheap because the whole country just lost a third of their retirement savings, investment savings, and plenty of people are losing their jobs?!
        And you think we should drive around unnecessarily so gas prices will go back up and the now much poorer people will have to pay even more money to drive to work?
        • 6 Years Ago
        Most retarded comment ever. I was thrilled that more people were buying motorcycles and scooters instead of driving their fat-a$$ SUVs. They might learn to be better drivers and to know what it's like for the 2-wheelers. Anyways, that's my pet peeve, but whether it's that or for environmental reasons, or for not making OPEC countries and Russia superpowers, it's great when we consume less oil.
        • 6 Years Ago
        I hope not. The low prices (even though they are caused by the economy) are a gift. If everyone keep driving conservatively we can keep gas prices low until we find something else to power our cars. If we just say, "Woo-hoo! Gaz iz cheapz!" and ignore what happened over the summer and drive wherever the hell and whenever the hell we want, we'll be staring at $5 a gallon gas signs all over again. Please America, don't be naive like Dan and screw it up.
        • 6 Years Ago
        Um, why? People have no money to buy anything when they get to where they're going anyway.

        On another note, it's amazing what happens when so called "industry experts and analyzers" STFU about gas prices for awhile...
      Mr. F.
      • 6 Years Ago
      I'll keep driving my scooter where ever I can thank you. And my F150 will sit in the back yard off the alley waiting for the next trip to the lumber yard or the Home Depot instead of hauling my butt to work. I don't care how cheap oil gets, it just means my scoot is cheaper to operate.

      Thank god the wife drives a well maintained 97 Escort Wagon that gets 30mpg tooling her to work.
      • 6 Years Ago
      So why is diesel still more expensive than 87 octane?
        • 6 Years Ago
        Because there are roughly 12 different kinds of diesel fuel sold through out the nation because of varying environmental regulations, yet we have built no new refineries in the last 30 years. So less capacity + equal or increasing demand equals higher prices.
      • 6 Years Ago
      Or you could live in North Carolina where we are STILL paying $3.50 a gallon!!! Stupid people around here panicked for no reason when Ike came ashore in TEXAS so we are STILL short on gas!
      Yes, thank you, I feel much better now! lol
      • 6 Years Ago
      Where are all the brainiacs who predicted $10/gal gas by the end of summer now? Guess they didn't predict the market/oil bubble going to hell in a handbasket did they? Did someone above really just say that gas powered cars won't be on the road in 10 years? If I had a dollar for every retarded prediction on this website, I could retire happily even in today's economy.

      BTW Toyota and Honda don't look quite as bright as the import fanbois claimed they were a few months ago either. Surely they would have predicted the economic bust just as they predicted high fuel prices right? Is that why they, along with everyone else, are reeling and slashing production and sales projections?

      Also, if it's any consolation to the many NC commenters, Chicago's prices are still above $3.50 too, I saw $3.79 on the Tri-state today.
        • 6 Years Ago
        We were clearly on our way to $10 a gallon gas. Then a bunch of morons in the corporate world decided to play russian roulette with America's future.
      • 6 Years Ago
      Oil has dropped due to the reasons hans stated. Investors are fleeing the oil market and placing their money in ultra-secure vehicles (no, not that kind) such as T-bills. Gold, as well, is rising sharply.
      Worldwide oil demand has significantly dropped due to the economic issues at hand, however, it's mainly due to decreases in industrial/commercial areas, not decreases in daily commutes, etc. China recently leveled out its oil buying (not increasing) and is now selling some of its oil, in fact. The US will enjoy gasoline price drops for the near future and likely longer IF the economies around the world continue to spiral downward.
      You've got to look at the big picture; it may be nice to fuel up the weekend sports car for $2.00/gallon, but fewer jobs and rising inflation will drastically negate any of the "benefit" of less expensive gas.
      Just my two cents.
      • 6 Years Ago
      Huh, I guess that supply and demand thing was true after all.
        • 6 Years Ago
        Yeah, go figure: economics work! Now quick, someone go tell politicians about this economics thing, maybe we'll all turn out ok.
        • 6 Years Ago
        Not quite - when Saudi Arabia increased supply near the height of the oil bubble, the price of a bbl of oil still INCREASED due to the speculators.

        Saudi Arabia just CUT their output and the price of oil still decreased by almost $10/bbl.
      • 6 Years Ago
      You can bet the money grubbers at OPEC are going to slash production to get the prices back up.
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