Gas prices could drop 30 cents by Thanksgiving

Tuesday, Oct. 23, 2012 8:40 AM
Last updated 6:31 PM
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Gas prices nationally have dropped 12 cents from last week, and experts say it could be the beginning of a trend toward cheaper fuel.

Prices in the Southeast are still about 15 cents higher than this time last year, but it’s likely prices will reach those levels if the decline continues as expected, analysts say, adding it’s possible that prices could drop an additional 30 cents by Thanksgiving.

“We’re back to the basic fundamentals of supply and demand moving the market,” AAA spokeswoman Jessica Brady said. “Oil supplies continue to increase as demand weakens across the board.”

The debt crisis in Europe has pushed down gas demand overseas and caused the euro to drop. U.S. oil stockpiles have jumped to a two-month high, and output is at its highest level in 17 years, according to the Department of Energy.

The average price for a gallon of gas in Georgia is $3.51. South Carolina’s average is 13 cents lower.

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OpenCurtain 10/23/12 - 08:57 am
Naturally - Hope and Change

Just before the election.
But where has it been the last 4 years?

InChristLove 10/23/12 - 09:13 am
My first thought

My first thought also.....odd, right here before election.

TParty 10/23/12 - 10:04 am
Thanksgiving is after the

Thanksgiving is after the election...

Augusta resident
Augusta resident 10/23/12 - 10:14 am

Tell the real story. South Carolina's gas prices is lower because their taxes are lower. Georgia has a law that automatically raises taxes on gas when gas prices reach a certain level. When gas goes down, so does the taxes.

Frank I
Frank I 10/23/12 - 11:01 am
Keep in mind the

Keep in mind the administration, current nor previous, has nothing to do with the day to day up and down of gas prices...

OpenCurtain 10/23/12 - 12:41 pm
To clearify a few points

Yes it was announced on the day of the debate, and just weeks before the election. If does not happen, it was still announced, planting false hope, which reduce the numbers of those voting based on gas prices. They have a fancy name for it in politics, we call it voting on a promise.

A US Presidents via his political party does have control of the gas prices and have used that control a number of times 1941-45, 1974, 1963 and 2007?. To name a few. Also releasing the national emergency oil reserve is one such trick used repeatedly to glut the market with oil for a few weeks and forcing a price drop.

BTW: Who donated $millions$ to Obama's 1st campaign (Oil Companies like Shell and a few others.) His Import, instead of drill and use USA resources policy, increases global market competition and increases profits for guess who?

Fools_and_sages 10/23/12 - 12:55 pm
Gas prices, history, reinferies, world politics, and oil supply

Everybody thinks that $1.59 a gallon we were paying when Obama took office was the normal. Sorry folks. I moved down here in summer 2008 and paid an average of $4.50 a gallon all the way down the east coast to fill up my U-Haul. So, six months before Obama took office gas prices were around $4 per gallon in the CSRA and they had been well over $3 per gallon for several years. In reality, the last time $1.59 per gallon was the norm was in the very early 2000s, before Afghanistan and Iraq. Our normal price range for gas in the CSRA should be $2.50-$3.00 per gallon. In 2008, gas fell like a rock to $1.59 per gallon because the world's economy tanked.

Of course you could also look at the correlation between the price of oil and gas prices and find there is none. The Big Oil companies are still making record profits while they increase the average price of gas by about 10c to 15c per year. For example, in June 2012 national average for a gallon of gas was about $3.45 per gallon and oil was at about $80 per barrel. In November 2010, national average for gas prices was $3.00 per gallon and oil was at $80 per barrel. Over 31 months, there was a 45c per gallon price increase relative to the cost of oil, for an average annual increase of about 17c per year. Big Oil increases their profit margins each year and there is no real relationship between gas and crude oil prices.

Gas rationing during World War II (1941-1945) was not price control. It was a gas allowance given to each driver in the form of ration stamps. Once you used your ration stamps for the month, you were out of gas. People who carpooled got more ration stamps. It was all about controlling fuel supply to make sure our troops overseas had enough fuel to fight the war. One could say that the gradual rise in gas prices through the Bush era was due entirely to rationing strategies put in place by the federal government to cut fuel use at home so enough fuel would be available for Iraq and Afghanistan. This is why diesel is more costly than unleaded gas these days. The military uses a lot of diesel. Before Iraq and Afghanistan, diesel was usually 25c to 40c per gallon less than regular gas. Since the wars, diesel has been up to 50c a gallon more than regular gas, though it's usually only 25c to 30c more.

While the strategic oil reserve has often been used to relieve gas prices, it doesn't do much these days. First, our refining capacity is lower than it has been in decades. Several refinery closings on the east coast in the last year or so reduced refining capacity to begin with. Then various refinery fires have further stunted fuel production over the last six months. The repaired refineries are just beginning to catch up with a back log of oil they have to refine. People who live in gulf coast areas can attest that there are tankers full of oil sitting in the ports waiting to be refined-- hence the oil stockpiles that are at a 17 year high. Out of commission tankers are actually being used to store oil as its delivered. Second, no new refineries have been built to replace the ones that closed. Everybody wants cheaper gas but nobody wants a refinery in their neighborhood because they are noisy, stinky, and spew pollution. More refineries would mean more gas and more decent paying jobs. But nobody wants the stench, noise, and pollution in their town.

When you look at the fact that area of the world that is most politically unstable right now is the Middle East and those countries control a large portion of the world's oil supply, tensions with Iran and their ability to shut down the Strait of Hormuz, affects the ability of Saudi Arabia, Kuwait, and Iraq to ship their oil through that area.

In short, we can't drill our way out of this because our refineries can't keep up as it is. We also can't blame Obama for high gas prices because they were just as high when Bush was in office. We also need to look at the political and economic situation in the rest of the world to consider gas prices. And, unfortunately, understanding history and the fact that there are different methods to achieve fuel rationing is key to understanding high gas prices.

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