Lower gas prices… How long is it going to last?

okaygrace By okaygrace, 9th Dec 2011 | Follow this author | RSS Feed | Short URL http://nut.bz/plqzh1fl/
Posted in Wikinut>Guides>Transport>Cars

Thoughts and explanations to why the price of gas has gone down so much recently

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If you drive and spend as much on gas a month as I do, I’m sure you are aware that the price per gallon has been steadily declining for the past couple weeks. Usually, the decrease in gasoline prices is tied to the decrease in the price of oil, but currently that is not the case.

U.S. oil prices are up nearly 9% over the past month and have pushed above the $100 a barrel mark. At the same time, the average retail price of a gallon of gasoline has dropped to $3.30 as of Wednesday from around $3.45 a month ago.

One might think that the main use of crude oil is gasoline, but actually only 42% of the world’s crude oil goes towards producing gasoline, which is one of the reasons why sometimes the prices of gasoline and oil are not directly linked.

During the winter, there is typically less demand for gasoline and more demand for other oil related products, for example fuels used for heating and things of that nature. This combined with the already currently lowered demand for gasoline due to the economy has given American citizens the temporary relief at the pump.

Prices are expected to rise again in the New Year, but based on the opinions of experts, it should be a long time before we see the $5.00+ a gallon prices for gasoline as we have had in some areas in the past. They estimate that we should see an overall decline in the price of gas over the next 1-2 years due to the declining economy, but as we have seen in the past any little disturbance that occurs with oil suppliers can change the price on gasoline rather quickly.

Time will tell on what will happen with the future in gas prices, but certainly I am not complaining on the current prices and I’m sure neither are you!

Tags

Demand, Gas, Oil, Prices

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author avatar okaygrace
I enjoy many things including making money online, playing poker, listening to music, etc.

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