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Page added on September 6, 2015
We could see gas under $2 by Christmas
The last time Labor Day gas prices were this low, George W. Bush was in his first term as president.
Prices have been going nowhere but down since June. And according to AAA, the average price of regular gasoline is now $2.40 per gallon — or more than $1 less than it was a year ago.
For this weekend, a time when a lot of Americans hop in their cars, prices are at 2004 levels.
The decline has been widespread. Average prices are still above $3 in only four states: California and Nevada, as well as Alaska and Hawaii — two states where everything is always more expensive.
Of the country’s 130,000 or so gas stations, more than 5% are selling gas for less than $2 a gallon, AAA says. In South Carolina, the statewide average has fallen below $2 in the past week.
For a lot of people, cheap gas is like getting a raise. The typical driver is saving about $50 a month because gas prices have fallen so much.
Americans are celebrating their savings.
Ben Prensky, 32, drove from a Philadelphia suburb to New York City with his family for the weekend. He has an SUV and usually fills up once a week. “With prices as cheap as they are, it’s been a huge help,” he said.
Another driver on a #roadtrip tweeted Sunday about spotting gas for $1.99 a gallon in New Jersey.
Why gas is so cheap
Gas is cheap largely because the bottom has fallen out on oil prices. Crude accounts for about half the cost of a gallon of gas.
So as oil goes, so does gas. Oil is trading now at under $46 a barrel. Last summer, oil was at $100 a barrel.
Oil is bought and sold on world markets and largely driven by supply and demand.
First, a surge in production from American shale producers has led to a massive glut of oil.
Normally, when prices fall, OPEC steps in and cuts production. But not this time. The cartel of some of the world’s largest oil suppliers — led by Saudi Arabia — continues to pump record amounts.
Some see the move as part of a Saudi strategy to pressure American shale oil producers.
The fact that Iran may be reopened to Western oil interests, because of the pending sanctions deal, has also helped drive prices lower.
Not only is there too much supply, but demand for oil has been sluggish.
Some developed economies in Europe and Asia are barely growing and emerging markets in Latin America are stumbling. Growth in China, the world’s second largest economy, has slowed dramatically. Economies need less oil when they cool off.
Of course, there is one big victim in falling prices: oil jobs. U.S. companies have disclosed at least 86,405 job cuts directly attributed to falling oil prices since June 2014, according to outplacement firm Challenger, Gray & Christmas.
Where gas prices are headed
Gas prices are headed lower still, experts believe.
The Energy Information Administration, a government agency that tracks the sector, is forecasting that the national average will drop to $2.11 a gallon by the end of this year.
Why? The supply and demand factors are not expected to change much. Besides, people always drive less after Labor Day, creating even less demand for gasoline, and U.S. refiners switch later this month to a less expensive blend of gas.
AAA says it believes gas will fall below $2 in many parts of the country by Christmas.
39 Comments on "We could see gas under $2 by Christmas"
BC on Sun, 6th Sep 2015 10:28 pm
Yes, because of another emerging global deflationary recession and corporate debt and equity bear markets.
Makati1 on Sun, 6th Sep 2015 11:27 pm
“We could see gas under $2 by Christmas”
This cannot be a good sign of the future…
James Tipper on Mon, 7th Sep 2015 12:18 am
It’s funny, pretty soon it will say gas is so cheap! Too bad gas stations went under because companies don’t want to sell it to you at that price!
Davy on Mon, 7th Sep 2015 5:57 am
We know what happened in the 30’s with food and fuel. When as BC says “emerging global deflationary recession and corporate debt and equity bear markets.” occurs the velocity of economic activity will go down. High school physics will tell you that. I see clear as day demand and supply destruction. I call this the end of the bumpy plateau and the beginning of the bumpy descent. The bumpy descent will be a time of systematic abandonment, dysfunction, and irrational activities.
How quickly the transition occurs is debatable. We have been on the bumpy plateau for 10 years now. Could it be another 10 years or 5 years? If we go into a recession/depression this could slow things down enough to limp along in systematic atrophy but our complex system has a minimum operating velocity below which it bifurcates.
We will surely see volatility in this descent that will be like the cold winters in global warming. It will confuse the sheeples and cornucopians alike. The cornucopians will be crowing the benefits of low prices as the economy is gutted in cannibalization that must occur when economic incongruities are occuring. This is not the 80’s and earlier. We are now in dysfunctional systematic decay. That is clearly apparent when one looks at the markets and central banks. There is nothing normal about the new normal.
kanon on Mon, 7th Sep 2015 8:47 am
I say the price of oil was lowered (1) because alternatives, especially electric cars, were gaining popularity, and (2) to squeeze Russia. The KSA v Frackers theme is a diversion. KSA and Frackers are all connected to the same FED and MIC. I agree with Davy about dysfunctional systematic decay, but I do not agree that we are all in this together. Only the money players matter and the fringe will just have to cope however they can. The “oil glut” will end when and if the political objectives are met, and that will take a while longer.
your mama on Mon, 7th Sep 2015 9:11 am
this article states that gas could be under 2 dollars by xmas. gas should have been under a dollar for
EVER!!
Davy on Mon, 7th Sep 2015 9:52 am
Yea, Kanno, the elites and connected will cannibalize the system leaving the weak to die but as with all other civilizations in descent that will only work so long. I expect the coming 10 years will be one human crisis after another until they have to be truly horrible to be considered a noteworthy crisis. We are going to be numb to human suffering soon. In the 18th century young kids died and it was tragic but common. People were accustomed to it. Young people die now and it is front page on CNN. We are going into a rebalance that will be ugly and painful.
green_achers on Mon, 7th Sep 2015 10:14 am
I paid $1.85 the other day.
penury on Mon, 7th Sep 2015 11:33 am
All of the kvetching about the price of a gallon of gas. I too remember when gas was under a dollar, a new house four bedroom was under twelve thousand, a new car was nine thousand and you could pay for college with a part time job.An apartment rented for 75 dollars a month. So what is your point? Producers, transporters and sellers also need to eat, rent and other things. Gasoline is not magically transported to your neighborhood for your pleasure.Want to kvetch about prces? How about steak and eggs.
apneaman on Mon, 7th Sep 2015 11:59 am
Davy, here’s yet another example of some pissed off folks pushing back from being caught in elite power games. Add 1 point for Putin & Co, subtract 1 point for Vicky Nuland & Co. Resume play.
Meanwhile In Brussels, Farmers Take On The Riot Police With “Hay Cannon”
“European farmers – protesting plunging food prices, blamed on Russia’s food embargo, which was retaliation to Europe and US sanctions – are demanding EU intervention to bail them out. ”
http://www.zerohedge.com/news/2015-09-07/meanwhile-brussels-farmers-take-riot-police-hay-cannon
Fat Lady on Mon, 7th Sep 2015 3:40 pm
I want a hay cannon.
green_achers on Mon, 7th Sep 2015 7:27 pm
It’s just a hydro-mulcher.
Makati1 on Mon, 7th Sep 2015 10:38 pm
While the ‘sanctions’ against Russia supposedly cost Russia about $100B to date, the cost to the UE nations is supposed to have exceeded that by at least $20B to date. Once again, the great leveling is happening. The US knew that it would hurt Europe by cutting exports to Russia and also that Russia was likely to respond with their own embargo, also hurting Europe. Does that say that Europeans are fools and servant to the US? Sure looks like it.
BC on Tue, 8th Sep 2015 11:51 am
NYMEX gasoline has a technical stop below $1:
https://app.box.com/s/z7k4t9gjjt0c1c2a9vi4ln456vk0mn1b
Retail gasoline versus working-class (bottom 80-90%) wages adjusted for CPI and the US$ is at or below the level of the past three recessions and cheaper than 25 years ago:
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=1LMR
Boat on Tue, 8th Sep 2015 12:53 pm
Mak,
Isn’t your view that the US has control of sanctions on Russia? The European union of 28 countries all voted for it. Along with Australia, Canada etc. Apparently the free world disagrees with you.
Btw, a new set of sanctions will be placed on Russia depending on continued harassment of Ukraine.
marmico on Tue, 8th Sep 2015 1:20 pm
Technical analysis is bullshit but let’s hit the $1 NYMEX RROB stop so I can purchase gasoline at a lower price.
http://www.eia.gov/forecasts/steo/realprices/
Fuck the oil “strippers” who have had bonus $ since 2005 and pissed it away on hookers and blow.
GregT on Tue, 8th Sep 2015 1:48 pm
Boat,
The DC oligarchs have control over the monetary systems of the countries that you mentioned, and none of them are “free”.
The overthrow of the democratically elected government in Ukraine was instigated by the US State Department. The Eastern Ukrainians are of Russian ethnicity, and to simply stand back and watch them continue to be brutally murdered by their own supposed government representatives is immoral, unjust, and in no way constitutes a free and democratic society. This is all part of your oligarchs endgame Boat. Their plan for total, global domination, and their plans do not include you.
BC on Tue, 8th Sep 2015 1:59 pm
marmico: “Technical analysis is bullshit.”
No doubt it is to you. The longtime practitioners, including energy firms’ energy traders, for which TA works quite nicely, thank you, smile when they read or hear that TA is BS. 😀
TA caught the 1998 and 2001 lows for WTI and gasoline, the projection for the high in 2008, and the projection for the low from 2014 to date; but that’s BS.
If you understood TA and its self-referential, self-reinforcing aspects, you would have an understanding of the price exhaustion levels, trends, support, resistance, and stops; but it’s BS to you, so you likely don’t know. 😀
But you do know how to curse with the best of the roughnecks, so we all need to be good at something. Congratulations! 😀
marmico on Tue, 8th Sep 2015 2:11 pm
Andy Hall lost a shitload in the oil market. Is that your reference case?
Or is it the worst investment manager on the intertubz for the last 10 years, your good friend Shedlock, (ranking equally with Schiff).
🙂 Fuck you!
GregT on Tue, 8th Sep 2015 2:35 pm
Investment managers are nothing more than bookies for the market casino marmi. Keep playing for long enough and you will eventually lose your shirt. That’s just the way that ponzi schemes work.
No rude and obnoxious behaviour required. Only basic arithmetic.
marmico on Tue, 8th Sep 2015 2:48 pm
Greggie T, such a pathetic Green Acres character.
He’s the epitome of the innumerate talking pig Arnold, just waiting for his parents to croak, so he can inherit the Vancouver real estate moolah, and be condescending to others.
Kenz300 on Tue, 8th Sep 2015 3:01 pm
With oil prices so low it is a good time for Countries to end their subsidies for oil and gasoline.
These subsidies just promote wasteful consumption.
GregT on Tue, 8th Sep 2015 3:12 pm
Don’t need the parent’s millions marmi. Doing just fine on my own. TYVM. 🙂
marmico on Tue, 8th Sep 2015 3:35 pm
Bullshit, Greggie T. You bugged out to Green Acres with your phony salmon river and porcine divots to shit in and pretend that you are a permaculturist.
Why would you advise peakoil.com about your inheritance otherwise?
You are just like Davy-boy – a fucking demented innumerate word salad prattle asshole.
🙂 Fuck off!
apneaman on Tue, 8th Sep 2015 3:49 pm
Ahhhh marmy-noon more bad news from your beloved markets? There there it will be all over soon enough. Why keep punishing yourself? You know it’s all but over. Are you not getting exhausted from dragging those goal post all over the place? Even if it staggers on for another decade or so sooner or later everything you cling to will be dust in the wind. I almost feel sorry for you.
marmico on Tue, 8th Sep 2015 4:03 pm
Heh, apeman, why don’t you do a deal with Greggie T? You could wipe his parents’ butts and sleep in the garage instead of mommy’s basement.
After all, when it is all said and done, you are allegedly marching for the 99% Occupy Wall Street crowd while Greggie T is a 1%er Green Acre just like Al Gore.
Nony still sticks with stuff like GOR. I don’t. You are fucking morons. 🙂
Nony on Tue, 8th Sep 2015 4:03 pm
Technical analysis is BS. Shouldn’t matter if you are a peaker or a cornie. Liberal or conservative. Technical is superstitious silliness.
apneaman on Tue, 8th Sep 2015 4:15 pm
marmy I have special place in my basement just for you.
https://www.youtube.com/watch?v=Bek6nQGw520
Nony on Tue, 8th Sep 2015 4:22 pm
Please, mister! 😉
https://www.youtube.com/watch?v=7rgSnm2-2ps
Davy on Tue, 8th Sep 2015 4:50 pm
Marmi, why all the hostility? You are a happy face cornucopian. Could it be things are not going according to your plan? BTW, I love when you talk dirty to me. You are such a slut Marmi!
marmico on Tue, 8th Sep 2015 5:07 pm
Heh, Davy-boy, I got a great idea.
Rather than threatening others with hand-to-hand knife fights, I’ll just offer you an alternative: Fire up the weaponized Drones.
When you are sitting on that rough wood bench that always produces slivers in the Green Acres outhouse with your 4:00 p.m. limp dick masturbation routine, you will never know what hit while you used the tweezers while fending off the zombie hordes.
Oh ya, according to the latest EIA callout, crude + condensate production exceeded 80 fucking million barrels per day.
apneaman on Tue, 8th Sep 2015 5:22 pm
Davy, catabolic collapse is much more painful for the faithful than falling off the Seneca cliff. Death of a worldview by a thousand cuts. The loss of identity is a living torture compared to the loss of all the physical comforts modernity has brought us. All that faith, arrogance and certainty being slowly eroded away by the reality of a physical universe. The hostility and venomous lashing out confirms that they know it’s true – it’s coming apart. I think a true cornucopia would be happy and genuinely optimistic (although deluded) and have no need to punish. I mean if you truly believed everything was going to be awesome why would you come around here? Is this where society’s most influential people hang out? A lot of policy makers come around here for information and ideas?
Davy on Tue, 8th Sep 2015 5:41 pm
Ape Man, so true. Marmi, is just beginning the 5 stages of doom. We know he is doom curious or he would not be here. Acceptance will come eventually when his itty bitty portfolio is more itty bitty. That is all Marmi lives for is his portfolio.
marmico on Tue, 8th Sep 2015 5:56 pm
You are a 1% piece of shit; Davy-boy, the fucking knife-to-knife fighter like Rambo while he jerks off in the outhouse.
Just like in grammar school, Davy-boy, when your big mouth ended with a bigger kick to your fucking head. Mom & Dad couldn’t figure out that you were concussed.
Your outhouse ain’t worth a $3,000 drone strike, Davy-boy.
Davy on Tue, 8th Sep 2015 7:13 pm
I am not quite right Marmi but my issues pale in comparison to your piece of shit life but I like you anyway. I have a weakness for asswipes.
BC on Tue, 8th Sep 2015 7:46 pm
So long, gents. Too much vitriol and not enough substance and good will toward learning and understanding.
But that’s probably evidence of the beginning of the end.
Peace.
GregT on Tue, 8th Sep 2015 10:20 pm
Sad to see you go BC. I, for one, appreciate your input. You have a level head on your shoulders.
GregT on Tue, 8th Sep 2015 10:23 pm
marmico,
Get a life loser.
ghung on Tue, 8th Sep 2015 10:41 pm
Jeez, BC, piss rolls off a duck’s back just like water.