Gas Price and Demand Plummet
With all eyes focused on the stock market and the presidential candidates and federal bailouts and whatnot, the cratering price of gas is getting lost in the fug of financial ruin. Anyone remember how much gnashing and wailing accompanied its rise? Anyway, Reuters reports that “The national average price for self-serve, regular unleaded gas fell 35.03 cents to $3.3079 a gallon on October 10 from $3.6582 two weeks earlier.” Trilby Lundberg (a.k.a. the “Prophet of the Pumps”) says plummeting oil prices and caving gasoline demand have “combined to bring the biggest retail gasoline price cut in the history of the market. We’ve been doing this 58 years. This is truly the biggest price drop.” Lundberg is predicting sub-$3.00 gas by December. Similarly, a recent MasterCard report carried by CNBC reveals that the U.S.’ most recent four-week average of gasoline consumption amounted to 8.921 million bpd, down 6.2 percent from a year ago.” Demand, down. Prices, down. So much for the China Effect.
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Popping into the local SuperAmerica this morning to get my cup of coffee (on my way to the Park n' Ride.....), gas was $2.839 here in Minneapolis. Over the weekend I saw it around $2.69 in the northern suburbs. I haven't been to the station where I get the non-oxy 91 octane stuff for the old car, but I suspect it is now probably in the $3.25 range judging from the other prices. However, since I put around 4,000 miles/year on the Firebird and she puts about 9,000 miles/year on the Rainier, gas prices haven't really been an issue in our budget. We haven't cut into the outings in the classic either, and we have been averaging about 2,000 miles/year in it (at 12mpg .... 383/4brl and a heavy foot .....).
I'm sure that the environmentalists are the only ones upset about gas prices going down. But don't worry you tree huggers, prices are bound to go back up.
a- its not cheap, its just less expensive. remember that in 1999 it was about a buck a gallon, as i recall. b- markets do not respond that quickly. It is likely that the reduction in price that we are seeing now are for contracts that were negotiated at lease a few months ago. c - i believe, tho i have no way to prove it, that alot of speculators got out of the commodity when the talk of public executions got heated. d-Airhen - i thought environmentalists and tree huggers were the same.
Will everyone who posted that $80 oil was not ever going to happen again please own your remarks or risk complete loss of credibility? For the record, I am still waiting for diesel to return to sub premium prices, so my petro predictions have still not all come true. Oh, and if you conspiracy guys could explain how this happened in your reality, that would be cool too.