Gas falls below $2
As of Friday, the national average price for a gallon of gas had fallen below $2 for the first time since March 2005. The rapidly falling price of gas has created a unique situation, where for the last seven weeks, the wholesale price for refined gasoline has been lower than the price of crude oil. This means that refineries are losing money on every barrel of oil they turn into gasoline. This market condition is, of course, unsustainable, and may lead to an even greater cutback in refining capacity.
All of this could be setting up the conditions necessary for another price spike in the future. Decreased gas prices will eventually encourage more driving, and decreased refinery capacity will decrease the supply of gas. However, due to the terrible economic conditions facing the nation right now, a substantial increase in driving habits will likely be deferred until better economic times.
- Similar Posts:
- While oil prices boom, refinery profits contract
- Oil falls but gas prices increase in San Diego
- California’s Mini-Price Spike for Gasoline Continues
Comments
Please contribute to the discussion by commenting below or posting in the forums. No need to agree with the post or other commenters, but please be constructive and respectful.
-
Private Leaders
