It wasn’t that long ago that the average price of gas fell below $3 a gallon. With the average price nationwide now standing at at $2.53 per gallon, it should come as no surprise that thirteen states have gas stations selling for less than $2, at least in some areas. The US is enjoying a holiday season reprieve from high prices seen as little as 6 months ago. As a nation, we have not seen prices this low since October 2009.
Oklahoma, Louisiana and Ohio have stations that are selling gas at $1.90 a gallon. With all the holiday driving that many people do, most people are actually smiling as they fill up their tanks. There are ten additional states that have prices lower than the two dollar mark as well – Alabama, Arizona, Colorado, Indiana, Mississippi, Missouri, Nebraska, New Mexico, Texas and Virginia. Missouri is the state with the lowest average price overall at $2.25. AAA reported some states have only one or two stations with prices this low, but that’s all it takes for other stations to follow to continue a trend.
The good news is these may not be the lowest prices we will see. Crude oil prices have dropped from $115 a barrel to under $58 a barrel. Three factors are causing the lack of demand for the supply. Saudi Arabia’s confidence in the market righting itself has caused them to refuse cutting back their production of crude oil. There is a slow down in construction and expansion in Europe and especially Asia, specifically China who has dominated a lot of the oil supply over the last decade. And last but not least – more fuel efficient cars that demand less gas have started to cause a small dent in how much the world uses in cars.
With it appearing there’s no stopping gas prices from continuing to fall, consumers are starting to spend more this holiday season. As retail spending rises, more jobs may be created to off-set the possible job losses from the United States shale oil production market.
The low prices also entice people to travel more, at least by car. It may not be the same for plane travel (at least not yet) as the falling oil prices have yet to yield lower plane ticket prices. If enough people opt for their cars, it may not be long before public pressure causes airlines to look at their pricing structures as well.
(Photo courtesy of KOMUnews)