Western Courier

Gas gets cheap drivers get happy

Erika Ward

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 It’s fairly common to hear people complain about the high cost of gas, but it may happen less often with gas prices dropping so tremendously in recent weeks.

 Oil experts, in fact, say they’ve never seen gas prices decrease as quickly as they have since mid-November.

 On Thursday in Macomb, some local gas stations were advertising gas prices as low as $2.37.

 “In my decade of watching oil and gasoline prices, I don’t think I’ve seen as steep a decline in a 48-hour time frame as what we saw on Thanksgiving Day and into last Friday,” said Patrick DeHaan, a senior petroleum expert, who writes a blog for the website, GasBuddy.com, which monitors gas prices.

 Petroleum industry observers say a big reason for the drop in gas prices has been because of an equally precipitous decline in the price of crude oil, which is refined to make gasoline.

 A variety of factors explain the downward trend in crude oil, including an increase in domestic oil production in recent years as a result of the increased use of controversial fracking technology.

 Barrel prices of crude oil have fallen more than $30 since the end of June. According to GasBuddy.com, prices will continue to drop a bit longer.

 The drop in crude has resulted in a corresponding decrease in the price of gas.

According to The Globe and Mail, barrel costs were at $67.19 in the U.S. on Tuesday. NBC Chicago recenlty reported that this boom in domestic production is largely due to the oil drillings in North Dakota.

Jonathan Cogan, spokesman for the U.S. Energy Information Administration, said his agency uses a formula that “if every $10 drop in the price of a barrel of crude oil is fully passed on to consumers at the pump that would equal a 24-cent drop in the price for a gallon gasoline.”

 So will prices continue to drop? The country’s main supplier of oil and petroleum is Canada. But because of the decline in the price of crude oil, Canadian railroads are losing a significant amount of their stock value.

 Share prices for Canadian Pacific Railway Ltd. have fallen eight percent and seven percent for Canadian largest railway companies — largely because the moving oil by train became less profitable for petroleum companies.

 GasBuddy.com has predicted that many states will see gas prices dropping anywhere from five to 15 cents per gallon within the next week and even more by mid-December.

 The other main factor in the drop in gas prices is the decision by OPEC (Organization of Petroleum Exporting Companies) to continue to oil production at high levels.

 “This is perhaps one of the most astonishing weeks in watching crude prices I’ve ever witnessed, and motorists will likely be giddy at what I see in our gas price crystal ball:  a 15 to 25 cent drop over the next several weeks, bringing the national average down to the $2.50s by Christmas,” DeHaan said.

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The independent student newspaper of Western Illinois University. Serving Macomb since 1905.
Gas gets cheap drivers get happy