How far will gas prices drop? American consumers asked this week, as some experts said summer prices could drop to 1990 levels.
“I just paid 1.97 dollars a gallon,” said Virginia business teacher Douglas Hubscher, who holds four advanced degrees in business and economics.
Hubscher told Xinhua Friday that several factors were driving the oil price to the 12-year low, including increases in domestic oil shale production and renewable energies that in turn had dropped the demand for overseas oil.
Chris Kahn of Bankrate.com said: “we’re not about to see the end of the road for cheap gasoline.”
U.S. Bureau of Labor Statistics said gas prices last dropped below 1.50 U.S. dollars a gallon in 1991, and were not much lower in the early 1980s.
“During the (former President Ronald) Reagan years we had a similar drop,” Al Rickard recalled. “Gas prices dropped to below one dollar a gallon due to fiscally tight Republican policies.”
Rickard is a Washington insider and publisher who worked for the Republican Party in the economically vibrant 1980s.
The federal Energy Information Administration (EIA) said gas would be average 1.98 dollars per gallon throughout the year, the lowest in 12 years.
“It’s all about global politics and OPEC nations producing more to retain their market share,” Rickard cautioned.
“It’s also part of the annual cycle of prices … By next March people will be wringing their hands about the gas of three-dollar a gallon,” he said.
But some said the reverse — that the 1.50 dollars a gallon range was not impossible before summer’s end.
That was the cost at the pump in the early 1980s during Jimmy Carter’s presidency, when the cost of crude doubled due to the Iranian Revolution in the 1979 Oil Crises.
Historians agreed that America’s dependency on foreign oil and the unexpected crises ruined Carter’s chances to be re-elected president.
American President Donald Trump has made energy independence a cornerstone of his agenda and increasing domestic oil production seems to be doing just that.
Oilprice.com said Friday that “U.S. shale is arguably the biggest reason why prices are floundering again.”
“Production continues to rise, with output expected to jump by 780,000 barrels per day this year, according to the International Energy Agency (IEA),” Oilprice said on Nasdaq.com.
IEA, a 43-year-old oil-monitoring group, said “ultimately, the shale rebound appears to have killed off yet another oil price rally, the latest in a series of still-born price rebounds since the initial meltdown in 2014.”
“Renewable energy is the way of the future and each year sees exponential increases in capturing part of the fossil fuel market share,” said Jon Creyts, the managing director of the Rocky Mountain Institute (RMI).
RMI advocates energy efficiency and cost reductions through a number of cutting edge practices and is involved in several projects in China.
Creyts told Xinhua that the economic benefits of renewable energy over oil and gas are significant.
The typical American household spent about 1,120 U.S. dollars less on gas last year than in 2014, according to the Oil Price Information Service.
With the peak domestic travel months ahead, consume groups such as the American Automobile Association (AAA) predicted a record number of domestic vacationers this summer.
According to GasPriceWatch.com, prices are lowest in the U.S states of South Carolina, Oklahoma, Alabama, Arkansas, and Mississippi due to low state gas taxes and close proximity to refineries along the Gulf of Mexico.
It also said meteorologists were carefully watching two storms in the Atlantic Basin, either of which had the potential to push fuel prices higher next week.
If either of these develop into a major storm and move into the Gulf of Mexico, they could threaten gas supplies coming from refineries along the coast, causing oil and gas prices to rise, experts said. Enditem