Fuel prices plummet – $2 per gallon could come soon

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By Russ and Tiña De Maris

If you like unraveling mysteries, here’s one that will likely affect you personally: While the demand for gasoline is at the highest it’s ever been since data was kept (1981), the price at the pump is still spiraling down. Did we say spiral? More like a big chunk of lead dropped from a tall building.

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It may be the bit of good news that RVers have been looking for. “The surprise that may soon hit some motorists: the nation’s cheapest gas prices may soon fall back under $2 per gallon as oil prices have plummeted nearly $14 in the last 8 weeks,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. Those words from DeHaan came out a couple of weeks ago, and the price drop just hasn’t stopped.

Typically we associate a high demand for fuel with even higher prices at fill-up time. But there are a few things in play here. U.S. crude oil prices are close to the $50 a barrel level, $12 less per barrel compared to a year ago. How tight is the relationship of crude to what you pay? About 60 percent of what you pay is tied directly to how much the oil buyers are having to pay for the raw product.

Adding to the deflating price at the pump is the uncertainty on the national level about China-U.S. trade relations. GasBuddy’s DeHaan says while the rhetoric over tariffs is sending shivers down the stock market spine, the bottom-line for gas and diesel fuel buyers is lower prices. Some raise concerns that if the trade war continues, the potential for a recession is in the air. Nobody wants that – but looking back, in the last recession the price of oil went clear down to $32 a barrel.

What was that saying? “Let us eat, drink, and RV – who knows what tomorrow will hold.”

##RVT902

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Mike
1 year ago

$2.00/ gallon not likely anytime ever here in California, and as of July 1st additional tax is being added. Why we’re even higher than Hawaii!!!

James Ballard
1 year ago

Except in California where the price of gas is going up.

Terry preece
1 year ago

Part of that arrival is BS. A friend of mine is a retired chemist for major refinery. With everything that comes out of a drum of crude, that oil companies could literally give gasoline and diesel away and still turn a profit.

Ann
1 year ago

When was this written? Before the refinery blew up, or before the drone got shot down?

Donny
1 year ago
Reply to  Ann

That’s what I’m wondering…The gas stations in central WA haven’t gotten the memo about prices dropping. Gas is still around 3.15 a gallon in this area.

meg
1 year ago
Reply to  Donny

Yep. Same here in Montana, also just came through Idaho and part of Nevada. If they have received the message, they have either torn it up or hidden it under a pile of paperwork on their desks.

Bryan Douglas
1 year ago
Reply to  Ann

The area I live in Georgia has seen unleaded down to $2.36 and diesel $2.63. Since the latest issues unleaded has gone up to $2.43 but diesel has stayed at $2.63.

Billy Bob Thorton
1 year ago

The stock market is at an all time record high. So ” shivers” because of China…really. Seems thats not an issue, right. I mean how could it be. Because now we are not subject to international pressures as much as in past history. We cut regulations, and started to drill, improved the technology to extract, and as a result are now the LARGEST single producer, and refiner, of petroleum products in the WORLD. We export more oil and refined products than we consume as a nation. Maybe, just maybe that might effect price, huh. Economics 101, see Laffer curve.

RON
1 year ago

In my opinion, you are exactly right!

John T
1 year ago

The Laffer curve is about taxation. Nothing to do with supply and demand. Economics 101.

Billy Bob Thorton
1 year ago
Reply to  John T

Good point, to a degree. The reference to the Laffer curve was referenced to show as supply increases, tax revenue increases due to a growing economy. The trick is to control gov’t spending, thus decreasing the national debt, without pain to the citizenry. By reducing the national debt, you free up budget money to, in a perfect world, keep taxes lower and maintain a healthy economy between revenues and expenses.
Mr. Laffer, along with Congressman Jack Kemp, his point man, proved this during the 80ties. It is refered to as ” Supply Side” economics. More gas, cheaper price.
So the referred analogy here was meant as; anytime you can increase supply (petroleum), over demand, the price (or tax rates in this example) will fall. The mechanism occurs in a free economy all the time. Tax and spend politicians do not grasp this basic economics 101 concept, as Dr. Laffer elequnently drew out many years ago on a cocktail napkin.