Gasoline prices on Wednesday in Kansas City had a ho-ho-ho look about them.
Many filling stations’ posted regular gas at $1.75 a gallon. What used to take about $30 to fill a tank a year ago now requires about $15. Consumers are benefiting from oil prices falling below $40 a barrel.
Oil has dropped 39 percent since June and may continue to fall after the Organization of Petroleum Exporting Countries recently decided to lift the ceiling on crude oil production, BloombergBusiness reports. Gasoline prices, which had been pushing toward $5 in recent years, fell to under $3 a gallon last year, and the drop is expected to go well below $2 in the coming weeks nationwide.
AAA reports that the national average should fall below the 2009 pump price.
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“Pump prices have fallen for 29 of the past 31 days, and today’s average price of $2.03 represents a savings of 1 cent per gallon on the week and 19 cents on the month,” AAA notes. “Significant yearly savings persist, and gas prices are discounted by 65 cents per gallon compared to this same date last year.”
U.S. Energy Information Administration reports that refinery production is ahead of 2014 and today’s demand. Just as OPEC has decided to stomp the accelerator on oil production, so are U.S. suppliers, nearing a record high production. Neither U.S. nor OPEC producers want to blink in this competition, which could result in one of them surrendering its share of the market.
Motorists are reaping the benefits in gasoline prices being held down in time for Christmas. That’s a boon for holiday travel and shopping.
“The relatively low price of crude oil is helping to sustain year-over-year discounts in the price of gasoline nationwide,” AAA reports. “Retail averages are down more than 50 cents per gallon in 48 states and Washington, D.C., and motorists in a dozen states are saving at least 75 cents per gallon versus this same date last year.
“Alaska (-$1.05) and Hawaii (-$1), two of the nation’s most expensive markets, are also the only two states where drivers are saving $1 or more per gallon compared to one year ago.”
But not everyone is dancing in the street over oil prices dropping and with them what motorists are paying at the pump.
“According to the latest data from the Bureau of Labor Statistics, the domestic oil and gas extraction sector lost upwards of 2,400 jobs during the month of November,” AAA reports. “This follows the October report, which showed the sector shedding approximately 2,700 jobs.”
But consumers are able to put the savings on the road to go places during the holiday and take the savings to stores for Christmas gift buying, or at least that is what a lot of retailers are hoping will happen.
Americans in 2015 saved about $100 billion on fuel. That amounts to more than $350 a person, BloombergBusiness reports.
It makes the Christmas season twinkle a lot more like the holiday lights at many decked out homes.