Falling gas prices give a lift to motorists ahead of the holidays
Californians: Now might be a good time to fill up your gas tanks.
Drivers are getting some relief at the pump with gasoline prices having dropped seven straight weeks. The national average for a gallon of regular gas now hovers just north of $3.21 , the lowest since December 2011, according to the AAA.
In California, a gallon of gas costs an average of about $3.65 — higher than the national average because the state requires a higher grade of gas for clean energy initiatives. But motorists are still cheering the price drops ahead of the holidays.
“It’s a great Christmas gift,” said Peter Piriyakul, 37, of Hollywood. “Anything helps, and if gas could go lower, that would be great.”
The satellite TV installer for Dish Network said that if the price to fill up keeps falling, he may splurge more on dinners out or better gifts for family and friends. “You don’t always notice how much it goes up, but it really adds up,” he said.
U.S. oil production grew in October to the highest level since March 1989, according to Bloomberg. Brent crude prices have dropped by about $10 a barrel since late August, and have lingered at about $105 a barrel this last week.
In addition, the cost of gas traditionally eases toward the end of the year because the peak driving season has ended and there is a seasonal shift to a cheaper winter blend of gas.
“There are seasonal factors involved. You have lower demand during cooler months,” said Patrick DeHaan, senior petroleum analyst at GasBuddy.com. “In California specifically, there haven’t been many refinery accidents and production has been more than adequate.”
DeHaan predicted that prices could continue to fall until mid-December. In California, he said, a gallon could drop below $3.50.
Industry watchers say demand for gas will drop in the coming years thanks in part to more fuel-efficient hybrid and electric automobiles.
“Instead of getting only 20 miles, they are getting 22 or 23 miles a gallon,” said Fadel Gheit, senior energy analyst for Oppenheimer & Co. “Between 20 and 22 miles, that is a 10% drop in gasoline consumption.”
The decreased likelihood of a U.S. military strike in Syria has also calmed global oil markets, analysts said. Although the country is not a big oil producer, there were worries that ramped-up U.S. engagement in the conflict could fan further unrest in a region already plagued with turmoil.
Already, unrest in countries such as Egypt and Syria has inflated global oil prices.
“Unfortunately for the U.S., it will remain inflated because the situation continues to [go] from bad to worse” overseas, Gheit said.
Prices could still inch back up as the holiday season approaches if any of California’s refineries experience a disruption.
The uncertainty has Frank Bar fuming.
The Hollywood real estate agent, who drives a gas-guzzling 1968 Buick convertible, said he’s seen gas prices shoot up about $2 a gallon over the last four years. Many motorists are so used to higher costs, he said, that even a little dip makes them irrationally happy.
“Everyone’s like, ‘Wow, prices are so low,’” said Bar, 47. “It’s actually disgusting. Prices shouldn’t be this high.”
