Gas prices on a national level have been falling since the middle of June and shed another 8.4 cents in the week ending July 13 to an average of $2.52.8 per gallon, the Energy Information Administration reported. Great news for drivers heading into the peak summer travel months of July and August.
The drop has been aided by rising inventories of gasoline, according to data provided by the EIA.
But the $10 per barrel drop in crude oil prices in recent weeks deserves the lion's share of the credit. Per the EIA, the price of oil accounts for 66% of the cost of gasoline. And oil has been falling amid souring sentiment on the economy (unfounded in my view) that began last month and news last week from the Commodity Futures Trading Commission that it may put limits on speculators. See CTFC may throttle speculators.
If you are looking for the cheapest prices in the nation, you will have to travel through the center of the nation's heartland. Prices in Oklahoma are averaging just $2.20 per gallon, with Oklahoma City pegged at $2.15, according to GasBuddy.com.
For every penny decline in gasoline prices, analysts estimate that consumers save $1 billion. The drop in price from over $4 per gallon has saved drivers tens of billions of dollars and provided major relief at the pump. The retreat in gas prices from June's peak has also been a psychological boost.
I go against the grain when it comes to many who believe a drop in gasoline prices will aid economic activity. A 20 cent decline in prices over a year puts $20 billion into consumer pockets but that is small change in a $14 trillion economy.
However, though I don't reside in Oklahoma, pulling into a Conoco station yesterday and filling up for $2.21 per gallon did put a smile on my face.
