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Crude Economics
Gas Prices Are Falling at a Record Pace

In case you hadn’t noticed, U.S. gas prices have been steadily dropping in recent months. No, this isn’t a holiday promotion on the part of your friendly neighborhood gas station—gas prices are following a steep drop off in global crude prices, which have nearly halved since June, as markets adjust to weak demand and abundant supply. Now, according to AAA, national price averages are coming down in ways they never have before. The Hill reports:

The auto group said the national average price of gas has fallen for 88 straight days, the longest period of daily declines ever tracked by AAA. […]

“The current week-over-week drop of 15 cents is the largest such decline in more than six years. Motorists are paying 43 cents less than one month ago and 85 cents less than one year ago to refuel their vehicles,” AAA’s analysis said.

Lower oil prices will hurt some American shale producers, but will have a net positive effect on the American economy. Cheaper energy is always good news for businesses, and consumers will certainly enjoy the discount they’re getting at the pump. This holiday season, it will be cheaper to visit distant relatives than it has been in years. Drive safe, America!

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  • FriendlyGoat

    The amazing thing is that all world consumers may have been paying ridiculous cartel and trader premiums for no particularly-valid “market” reason for a long, long time. Which market is more “real”? The one we’re in or the one we had become accustomed to?

    • MartyH

      Of course people have had a valid reason for paying premiums-supply was constrained by the cartel, so the price rose. The price stayed high enough long enough that other, non cartel sources of petroleum (fracking) became profitable. The cartel’s leader decided that it could live with the lower prices, and so the supply is continuing unabated, driving the price down. The fact that a cartel would limit supply is as old as guilds, if not older. A cartelized market is as real as a free market-just usually more expensive.

  • Jacksonian_Libertarian

    The world is 6 years into Great Depression 2.0, so this comes as a huge relief to the economy and especially lower income consumers who’s gas budget represents a much larger portion of their income. Gas is $1.96 at my local station, I haven’t seen gas below $2 for years.

    • FriendlyGoat

      I wouldn’t necessarily argue with you that the world is still in a depression, but why are American stocks at all-time highs in that environment, and why is the world itself producing new billionaires at the fastest clip ever? What’s missing?

  • Thomas Heffron

    What happened to “It’s Obama’s fault”?

    • FriendlyGoat

      Well, Obama would be blamed it the prices were still going up. But his administration cannot be credited with them going down.
      That would violate a conservative principle, namely, that any prosperity achieved under a liberal presidential administration is a fluke or the result of delayed timing. Maybe somebody is already arguing that Dick Cheney “set the stage” for this decline many years ago. If not, maybe they soon will.

      • Government Drone

        Well, this whole boom is due to increased production in North America, which is something the Obama administration has never tried to encourage. His administration has in fact been trying to get the US off of petroleum by, among other things, restricting access to Federal lands, tighter regulation of refineries, promotion of alternative means (solar, wind) of generating electricity, & extending tax breaks/credits to people buying electric cars. Administration officials openly talked about pushing the price of fossil fuels up to prompt a switchover to more fashionable energy sources. Obama never bragged about increased oil & natural gas production till the 2012 election, when he needed the votes of people not members of the Sierra Club or Greenpeace.

        No, the Obama administration deserves no credit for this whole development. This is not a “conservative” principle, but merely a conclusion derived from facts.

        • FriendlyGoat

          It’s not like there is no climate change. Yeah, I know, that involves another conservative principle.

          • Government Drone

            Now that you’ve brought it up, that brings us to another reason not to give the current administration any credit for falling petroleum prices.

  • Rick Johnson

    This is great news for the environment. Lower gas prices means more driving. More driving means more CO2 emission. CO2 is plant food, so more plant growth. More plant growth means more food Win win all round. No downside.

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