Gas prices pleasant as economy tanks
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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Reader Comments (Page 1 of 3)
Dan 6:40PM (10/10/2008)
I hope this will increase the amount of driving back to normal levels.
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Red 6:50PM (10/10/2008)
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...
JD 6:51PM (10/10/2008)
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.
Seminole 7:36PM (10/10/2008)
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.
Billy 8:03PM (10/10/2008)
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.
Dylan 11:11PM (10/10/2008)
Wow dan, you're not so smart eh.
The gas prices are down because the economy has gone to sh#$ and nobody has money to spend on gas so they're driving less. The funny thing about your statement is this is just going to continue, low gas prices and nobodies buying because there are less jobs, less money and less people willing to shell out to get to the corner store. If driving is your passion, start looking at something that doesn't use as much gas because this isn't going to change, in fact in 10 years i doubt there'll be a fully gas powered car on the street, oh but I'm sure normal driving will ensue, cept the cars will be electric and you will be the village idiot.
tekd 11:51PM (10/10/2008)
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?
Wow.
Sean 3:34AM (10/11/2008)
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.
notYou 6:54PM (10/10/2008)
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).
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brandon 7:39PM (10/10/2008)
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.
geo.stewart 10:01PM (10/10/2008)
somebody needs to tell charlotte gas prices are supposed to be tanking. its still 3.80 here
Christian de Saint Preux 12:57AM (10/11/2008)
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!
montoym 7:39PM (10/11/2008)
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.
john 7:06PM (10/10/2008)
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.
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Galley 7:09PM (10/10/2008)
I filled up for $2.79 today. My last fill-up was $3.75. We're just now getting regular fuel supplies.
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DC 7:18PM (10/10/2008)
I can only imagine what those Dodge/Chrysler/Jeep owners feel like right now. They bought their vehicles thinking 2.99 gas was going to never happen. And now they are stuck with the cars.
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Duders 7:28PM (10/10/2008)
Haha, that's probably the funniest thing in the world. Not the gas thing, just that people were foolish enough to get tricked into buying Chryslers. Poor saps.
Quan 7:33PM (10/10/2008)
Yeah, all two of them who actually went for that deal.
paul34 3:57PM (10/11/2008)
They probably feel terrible, but only because they are now truly realizing that they bought a Chrysler product.
Berto 7:24PM (10/10/2008)
I am so glad to see prices finally dropping.
Keep in mind that our driving patterns are not the MAIN reason for this huge drop.
This is due to the fact that 2/3 of our petroleum consumption is for transportation, but over half of our transportation is in commercial trucks, trains, buses, ships, airplanes, etc. According to refineries, only 44% of the oil in a barrel is used for gasoline, which of that a huge number goes to businesses.
The rest of the oil goes to produce other fuels for industry, trains, ships, trucks, propane, wax, asphalt, detergents, and other oil based products. So Basically, during economic booms, price oil rises sharply due to the increased industrial and distribution activities.
We are currently facing a global economic contraction where we are seeing economic power houses slow down, therefore using less oil in manufacturing and distribution.
Countries like the US and England are facing industrial stagnation, and countries like China and India are slowing down.
We'll probably continue to see a steady decrease in price for a few months before we see a significant rise.
My advice: Enjoy the FU#K out of being able take your favorite car out for a longer drive!!
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