A Dramatic Drop (and More Room to Fall) for Gas Prices
A slumping world economy and falling crude-oil prices may soon push gasoline below $3 a gallon, which is great news for consumers.
A Dramatic Drop (and More Room to Fall) for Gas Prices
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Bob Johnson: This week's chart shows the level of gasoline prices. Note that it has been exceptionally volatile, but it's currently falling. This is great news for the consumer. Last year, the consumer had falling gasoline prices, and the fourth quarter represented their best level of consumer spending. So, there is a very close correlation between gasoline prices and consumer spending.
Where do we stand right now? Gasoline prices have fallen from $3.70 a gallon in April to $3.08 currently--a very dramatic fall in a relatively short period of time. And, in fact, that's still down 6% to 7% from one-year-ago levels when the fourth quarter did so well.
Looking ahead to the future, I think gasoline prices will continue to fall, which will continue to benefit the consumer. A slumping world economy and crude oil, the basic raw material for gasoline, continues to fall. Those two items together will help drive gasoline prices, perhaps, to under $3 a gallon in the near future.