The free fall in gasoline prices has notched another milestone — Missouri and Oklahoma are the first states since 2009 to report average prices below $2 a gallon, according to AAA.
Missouri claimed bragging rights with the lowest average statewide price of $1.92 a gallon on Tuesday, followed by Oklahoma’s $1.98. The Midwest overall has the lowest regional prices, while the highest are in the Northeast.
In Kansas, the state average is $2.02, good enough for third lowest in the nation.
“It’s great news for us,” said Mike Right, a spokesman for AAA in St. Louis.
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Pump prices for unleaded in the Kansas City area fell below $2 several weeks ago. They now average $1.89 on the Missouri side and a few cents higher on the Kansas side, although drivers probably can find better prices at certain locations.
Nationally, gas prices averaged $2.27. The highest state price was in Hawaii at $3.53, followed by New York, where motorists are paying an average of $2.80 a gallon.
Gas prices in the U.S. have declined for 95 consecutive days, and OPEC’s decision in November to not reduce oil production has caused oil and gas prices to drop even faster. AAA estimates that motorists are saving $500 million a day compared with what they were paying in the spring.
Missouri motorists, for example, are paying 56 cents a gallon less than a month ago.
The state’s low gas taxes and access to plenty of fuel flowing from the Gulf Coast and regional refineries have combined to push prices to a nationwide best.
The questions now: How long will these prices stick around, and could they decline even more?
“It will last only so long before it turns around, and someday it will,” Right said.
When that happens depends on oil prices, which have been slashed by nearly half since June. A barrel of West Texas Intermediate crude that cost $101 in June closed Tuesday just below $54 on the New York Mercantile Exchange.
Oil markets Tuesday showed they weren’t immune to developments that could tighten supplies. Oil prices were up slightly after a report that Libya’s oil output was down.
But as long as OPEC doesn’t cut production, that will keep downward pressure on prices in 2015. However, curbs in drilling wells in U.S. and elsewhere will eventually help tighten supplies.
Steve Mosby, a partner in Admo Energy, which helps fuel retailers buy fuel to resell, has never seen anything in his decades-long career as dramatic as the recent decline in fuel prices.
He expects oil prices to fall below $50 a barrel. But after that, he said, the decline will probably lose steam.