AP: Gas drops below $3 a gallon, but how long will it last?
After weeks of news reports abounding with economic doom and gloom, glancing at gas station signs in recent days has afforded welcome relief.
According to information from AAA, the national average price for a gallon of regular unleaded Tuesday was $2.89, down 86 cents from the $3.75 it reached a month ago. Locally, prices started creeping below $3 a gallon this week, with several McHenry County stations posting prices in the $2.90s Tuesday.
Everyone from local residents to gas station owners to experts agreed that it was impossible to know if gas prices would continue to drop. But they also agreed that consumption habits had changed, probably for good, which had reduced overall demand.
Jim Rockcastle, who owns two local Marathon gas stations, one in Crystal Lake and the other in Cary, said his prices were hovering near $3 a gallon Tuesday.
He added that he expected them to continue dropping until at least the end of the year, but he said it was hard to predict beyond then.
Rockcastle said he had seen demand decrease and expected it to stay low.
“The oil companies are going to suffer a lot because people have learned how to cut back and not purchase as much,” he said. “Even with prices down, the demand is just not there.”
Nicole Niemi, AAA spokeswoman, agreed.
“People have learned how to drive smarter,” she said. “Even though gasoline prices have come down, the economy has been in turmoil. I think families are still really feeling a pinch to the pocket books.”
Pam Stocks, a Ringwood resident, said she was glad prices were dropping, but she wasn't planning to lose any of her new-found gas saving habits, such as combining her errands into one trip.
“And we’ll be much more careful when we buy a car, no matter what gas prices are,” she said.
Others, such as Sharon Walter of McHenry, said they didn’t monitor gas prices too closely.
“I mean, when it’s really high you do notice. When it’s $60 to fill up your tank, you’re like ‘whoa,’ ... [but] I just get gas when I need it,” she said.
Niemi said the drop in price was caused by two main factors – lower crude oil prices and a freshly stabilized post-hurricane gulf region.
However, both of those could change.
“There are so many variables that come into play that it’s very difficult to predict [prices],” said Scott Dean, spokesman for BP in the United States, based out of Warrenville.
For example, it’s still hurricane season, which means the gulf region easily could be destabilized if a storm hits, Niemi said.
Also, the Organization of the Petroleum Exporting Countries will consider a decrease in crude oil production later this week, which would increase the price, Dean said.
He added that a barrel of crude was trading at $75, or about half of the $147 it traded at in July.
“Crude oil accounts for more than half for the cost of a gallon of gasoline,” he said.
Rockcastle said he was unsure what the future of crude oil and gas prices holds, but he said he was pretty certain that consumers wouldn't dive right back into old gas-guzzling ways.
“People have learned how to conserve on the product,” he said. “I think they’re going to be very cautious.”
National average price for a gallon of regular unleaded gas
