• May 18, 2011
The price of a gallon of crude may have dropped by $16 in the past month, but for the most part, gas prices haven't followed suit. In fact, the nationwide average hit $4 per gallon just last week, or $1.10 higher than it was at this time in 2010.

But while relief at the pump feels far from fruition, Reuters reports that the worst may be behind us. Gas prices have dropped to a national average of $3.96, the first decrease in eight weeks. Diesel fuel is cheaper as well, down 4.3 cents to $4.03 per gallon.

Phil Flynn of PFGBest Research in Chicago reportedly told Reuters, "I think we've turned the corner and we should expect to see substantial price drops in the coming weeks." Flynn adds that we should see a national price of $3.50 per gallon at some point in the summer. Guy Caruso of the Center for Strategic and International Studies goes a step further, speculating that we may have already seen the peak gas price for 2011.

It's hard to believe that we're looking forward to $3.50 per gallon gasoline, but even a cut of 50 cents per gallon can be a big relief on the family budget. If, for example, you drive 15,000 miles per year and your vehicle averages 25 miles per gallon in mixed driving, a per-gallon drop of 50 cents could result in another $300 in your pocket at the end of the year.

It's still early, but we're thinking that the downward trend of oil prices means that relief at the pump is relatively close. Of course, we're not likely to pay $2.50 per gallon again anytime soon, but we'll take whatever we can get.


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  • 22 Comments
      Lamar
      • 3 Years Ago
      They have topped out this year. Oh unless there is a hurricane. Oh or if there is some unrest in another middle-eastern country. Oh unless there is some other unforeseen event that happens within the next 7 months. It's not very likely that something unforeseen would happen... Seriously, how could they even pretend that they aren't going to go up and keep going up. I don't know about you but I am doing all I can to use as little as the stuff as I have to. My Civic is alright, but I really wish I could afford to drive my Ram.
      Instant Supercar
      • 3 Years Ago
      a "Barrel" of crude is down $16, not a Gallon. Fix that typo please :)
      TruthHertz
      • 3 Years Ago
      God forbid we end the moratorium and start drilling on our own land. Regan did this after inheriting a recession from Jimmy Carter and oil prices dropped immediately even though no drilling had begun due to speculators selling off their futures. I doubt black Jimmy Carter is going to do anything though...
        David
        • 3 Years Ago
        @TruthHertz
        So, lets just say that we can find enough oil in the US to produce about 2 million barrels/day. Sounds great, problem solved, right? Oh yeah, we use 21,000,000 barrels/day and we already produce about 9 million barrels/day on our own. So, we would still be getting half of our oil from foreign sources. Now, that 22% increase in production could, theoretically, result in a $0.44/gallon decrease at the pump, but we still have this issue of oil dependency. Oh, and who cares which political party is to blame for higher gas prices? I want to know which political party is going to finally sever our dependence on oil
        Stix
        • 3 Years Ago
        @TruthHertz
        What makes you think that domestic drilling will help us solve our oil needs? The amount of untapped oil we have in our country is not enough to meet our oil consumption needs for even a year or two. How can we be sure that the oil we drill in our own land doesn't get sold off to other nations? And what makes you think that the President of the United States has any influence or relevance in the oil industry?
        BigProof
        • 3 Years Ago
        @TruthHertz
        So I like all your ideas. Do absolutely nothing. Let the $4+ gas continue to ravage our already fragile economy with looming economic uncertainty. Who wants to stick their neck out right now, especially when the administration wants to raise taxes on the "evil rich" which ends up being a majority of small business owners that have S-Corps claimed on a personal return.
        SheldonRoss
        • 3 Years Ago
        @TruthHertz
        It's a global economy, oil goes to the highest bidder. Even if we produce our own, it will still end up on the open market and sell at market prices. Of course more competition could drive prices down, but it's not like producing oil locally is some magic bullet. Oh yeah, and we get most of our foreign oil from Canada anyway, not exactly an unfriendly source.
        TruthHertz
        • 3 Years Ago
        @TruthHertz
        Not with the democrat congress he had during his second term when fuel prices started to really rise.
        Manuel Ruiz Zamora
        • 3 Years Ago
        @TruthHertz
        and a bush will do it ?
      Hazdaz
      • 3 Years Ago
      Only a fool will think that gas prices will come down by any dramatic measure. They might go down 10 or even 20-cents in the short term, but the long-terms trend is upward no matter how you look at it; its a finite resource and demand is only going to increase (not just in the US, but in developing nations like China and India where they have only now just started to really industrialize). The time is NOW that we have to wean ourselves off of oil as much as possible. Through more efficient transportation, and ultimately through a transition off of an oil-based transportation system. But alas I know that Americans are way too short-sighted to think past next week, let alone next month or next year. They will see a drop of 5-cents in gas and run right back to their SUVs and full-size trucks, and then cry bloody-murder again when prices jump again in 6 months.
      Kevin W
      • 3 Years Ago
      "Of course, we're not likely to pay $2.50 per gallon again anytime soon." Not till late October/ early November 2012, anyway. Same as in 2008. Coincidence, I'm sure...
        JK
        • 3 Years Ago
        @Kevin W
        The 2008 fall was due to the market collapse and it's effect on oil speculators.
        montoym
        • 3 Years Ago
        @Kevin W
        Well, coincidence in the sense that every year towards the end of the year, oil, and thus gas, prices fall. I know you are making a connection to the election, but that's just due to the fact that the election happens to fall during that end of the year cycle. If you looked at data for all years instead of just election years, you'd see a similar correlation. I will agree though that the 2008 drop was exceptionally large, but the price of oil had also risen to previously unseen highs that year(which were largely unwarranted and definitely unsustainable) so there was a much larger possible fall there. Oil and gas prices also tend to rise each year around springtime, care to throw out a correlation to politics there?
      jtk
      • 3 Years Ago
      I have a hard time believing any of these analysts. 3 weeks ago they were talking about gas reaching $5 and $6 a gallon. But I guess writers have to eat too.
        montoym
        • 3 Years Ago
        @jtk
        It's rarely analysts that are making those claims. They are generally traders or others involved in investments who have a vested interest in the price rising. So they put those figures out there to keep pumping the price higher. Most analysts I read are much more temperate in their analysis. But, the guy who says gas will top out at $4/gal. this year isn't likely to get as much press as the guy who says it will go to $5 or $6/gal regardless of how accurate his predictions are. It's the nature of the media, they want sensationalism. Here's the blog of one such analyst who I put a lot of faith in, http://blogs.opisnet.com/
      Jew
      • 3 Years Ago
      So looks like casino ( I mean exchange) is going down. So sad that people think that these fluctuations in pricing has some sort of logic behind them .Exchanges, Stocks, Bonds, Commodities all of that stuff its just a legal way for the rich to play and gamble with other peoples money. I have more confidence that the craps table @ Cesars Palace is being properly regulated over the SEC and Wall ST
      Jew
      • 3 Years Ago
      Now I will wait for the "You guys are lucky In Europe we pay $XX per liter" and the " The Liberals and Obama are responsible for this, blah, blah, blah" responses.
      Jake
      • 3 Years Ago
      Nobody pumps crude into their car. Gasoline prices are based on gasoline futures, not unrefined crude.
        montoym
        • 3 Years Ago
        @Jake
        The majority of the price of a gallon of gasoline is based on the price of the crude used to make that gasoline. 68% of the price if you want an exact figure, taken from http://www.eia.doe.gov/oog/info/gdu/gasdiesel.asp So, yes, the price of oil does directly affect the price of gasoline which is reflected in gasoline futures. While technically two different things, they are closely related.
      ALafya
      • 3 Years Ago
      Even if it will go down a little bit (I doubt it's going to go down $0.50), the mid and long term outlook is up. Get used to it and START LISTING MPGs when reviewing new car/engine offering.
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