Gas Prices Are Dropping Below $2 Gallon

gas

This week, gas prices have dipped below $2 in certain areas of the country for the first time in about a decade, with 13 different states having reported that the $2 threshold has been broken.

Chris Isidore of CNN writes, “Data from price tracker GasBuddy.com shows that three states — Oklahoma, Louisiana and Ohio — have at least one station each selling regular gas for less than $1.90 a gallon. Cheap gas is most frequently found at stations in Oklahoma, which was the first state to break the $2 a gallon mark on Dec. 3.”

Some of the other states included on that sub-$2 list are Alabama, Arizona, Colorado, Indiana, Mississippi, Missouri, Nebraska, New Mexico, Texas and Virginia (dammit Florida, why have you forsaken us???).

But why are gas prices suddenly dropping? Well, there are a million conspiracy theories out there– for example the elections and the political maneuvering is now over for a little while– but let’s forget the speculative side of the question for a second (you can always do that on your own time) and focus strictly on the facts.

Gas TaxThe main reason that gas prices are dropping is that oil prices are dipping. In fact, crude oil is trading below $60 for the first time in five years. This has happened for two major reasons:

  1. There is a falling demand for oil, which is related to economic slowdowns in Europe and Asia and the availability of more fuel efficient vehicles.
  2. The United States has recently amped oil production to the point that we overtook Saudi Arabia earlier this summer as the largest source of crude oil.

Undoubtedly, these are all great developments for the common American. In fact, if the current prices continue, the lower oil and gas prices are the equivalent of a $200 billion cost saving to American consumers and businesses (via Fox News).

Even better than that, though, is the fact that some are forecasting that oil could drop below $40 a barrel at some point in 2015, further dropping gas prices. That’s something that we can all get behind.

 

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