Gas prices fall below $3 in two states

Gas prices are silver lining in economic gloom. Since April, gas prices are down more than 30 cents a gallon and experts predict more decline.

|
Rick Bowmer/AP/File
A gas station attendant pumps gas at a gas station last week in Portland, Ore. On Friday, oil prices plunged nearly 4 percent on gloomy economic news, which will force gas prices down in the coming days.

There's some good news behind the discouraging headlines on the economy: Gas is getting cheaper. At least two states had stations selling gas for $2.99 on Friday and it could fall below $3 in more areas over the weekend.

A plunge in oil prices has knocked more than 30 cents off the price of a gallon of gas in most parts of the U.S. since early April. The national average is now $3.61. Experts predict further declines in the next few weeks.

If Americans spend less filling their tanks, they'll have more money for discretionary purchases. The downside? Lower oil and gas prices are symptoms of weakening economic conditions in the U.S. and around the globe.

On Friday, oil plunged nearly 4 percent as a bleak report on U.S. job growth heightened worries about a slowing global economy and waning oil demand. The unemployment rate rose to 8.2 percent from 8.1 percent. Sobering economic news from China and Europe also contributed to the drop.

West Texas Intermediate, the benchmark for oil in the U.S, fell $3.30, or 3.7 percent, to $83.23 per barrel, the lowest price since early October. The drop adds to a 17 percent decline in May. Brent crude, which is used toprice international oil, lost $3.44, or 3.4 percent, to $98.43 per barrel, its lowest price since January 2011.

U.S. drivers should feel some relief, even if they're worried about jobs. Auto club AAA says pump prices fell nearly 5 percent in May, the largest monthly percentage drop since November. Some station owners in South Carolina on Friday even presented drivers with a gift at the start of summer driving season: $2.99 gas.

Dan Durbin, president of R.L. Jordan Oil Co., says low wholesale prices allowed at least seven of the company's Hot Spot stations in Spartanburg, S.C., to lower the price to $2.99 per gallon. South Carolina also has the lowest gas tax in the nation.

Durbin predicted that more of his stations and some competitors will lower prices once they sell off higher-priced supplies currently in their tanks.

Gas also fell below $3 in Harrisonburg, Va. It could hit $2.99 or lower in Georgia, Missouri and Oklahoma perhaps as soon as this weekend, according to Tom Kloza, chief oil analyst at Oil Price Information Service.

Gas hasn't been below $3 per gallon anywhere in at least two months.

Analyst Patrick DeHaan of the website GasBuddy.com expects prices to fall below $3 a gallon soon in Tennessee, Alabama, Mississippi, which benefit from proximity to refining hubs.

Kloza predicts that motorists will pay an average of about $3.50 per gallon or lower by Father's Day. And drivers on the West Coast should see even bigger declines than other parts of the country. Their prices had been rising because of a gas shortage.

Gas prices should stabilize in July and August, Kloza says.

It's still questionable how much lower gas prices will boost consumer confidence.

Phil Flynn, an analyst for The Price Futures Group, believes falling gas prices could give consumers a psychological boost. But that could evaporate if hiring doesn't pick up and stock markets keep swooning.

"If you don't have a job, it doesn't matter if gasoline prices are $5 or $2 a gallon," he said.

Those who can afford a new car payment will appreciate falling gas prices. Automakers reported selling 1.3 million cars and trucks in May. Auto sales remain a bright spot in the U.S. economy. Still, those sales won't reverse a decline in gas demand in the U.S. because the new models are more fuel efficient than older ones heading to the scrap heap.

Energy futures fell across the board, as did global stock markets. Heating oil fell 7.53 cents to $2.628 per gallon, gasoline futures fell 6.59 cents to $2.657 per gallon and natural gas dropped 9.6 cents to $2.326 per 1,000 cubic feet. U.S. stock markets dropped more than 2 percent and are now lower for the year.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Gas prices fall below $3 in two states
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2012/0602/Gas-prices-fall-below-3-in-two-states
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe