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Hail Shale
US Gas Prices Dip Below $2

American drivers, rejoice! The average U.S. gas price yesterday dropped below $2 per gallon for the first time in six years. The Hill reports:

The average gas price on Monday morning was $1.998 per gallon, [said AAA], or about 41 cents cheaper than one year ago. The last time prices were this low across the United States was March 25, 2009.

Gas prices traditionally fall during the winter months because people use less fuel. But AAA said they are particularly low this year because of high gasoline supplies and low oil prices around the world. The group expects the low prices to last through at least January before rising later on in the winter. Prices could drop further, however, if crude oil remains low.

AAA said the average price of a gallon of gas may not go above $3 per gallon next year due to low crude oil prices and high supplies.

So what’s behind these discounts at the pump? Domestically, we can look to shale production for some explanation: U.S. oil production is averaging well over 9.3 million barrels of crude per day so far this year, a far cry from the 2000s when daily output generally stayed between 5 and 6 million barrels per day. Fracking has bolstered American oil production, which has in turn helped bring down the prices of refined petroleum products like gasoline.

Of course, American shale firms aren’t the only producers contributing to what today is a considerably oversupplied global oil market. OPEC’s petrostates have kept output up in the face of falling prices, as has Russia (recently nearing post-Soviet highs). And with China’s slowing economy weakening global demand, oil prices have plunged from a high in June 2014 of more than $115 per barrel down to just $36.17 today.

Cheap oil has plenty of geopolitical consequences, but it affects average Americans, too. As drivers take to our nation’s highways to visit family this holiday season, they’ll be spending less on gas than they have since 2009. It’s hard not to read that as good news.

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  • Dale Fayda

    Not in California – $2.73/gallon of regular gasoline. LA County – $2.90/gallon. Why such a big difference, you ask? CA State taxes and “clean energy” surcharges – in other words, liberal idiocy.

    Forward…!

    • Kevin

      CA also has very limited refining capacity and an inability to import gasoline from other parts of the country (largely due to its unique regulations).

      • Dale Fayda

        And why does CA have “limited refining capacity”? Because it’s well-nigh impossible to build a refinery there. No new ones have been built in decades, even though the population and the demand for gasoline have increased greatly. Same as with the water management system – no new reservoirs in over (40) years! Why not, you ask? Rabid opposition by every single environmental group and by the Democrat-controlled state legislature and local governments.

        “…inability to import gasoline from other parts of the country (largely due to its unique regulations)” – precisely. Liberal idiocy.

        • Suzyqpie

          ….. Same as with the water management….to bad CA isn’t located near any large body of water….oh wait…

        • f1b0nacc1

          I have some direct experience with this. A firm I was doing some consulting with wanted to build a refinery in CA, and was stiff-armed by their regulatory nazis. This wasn’t an issue of environmental safety, land use, etc. it was simply ‘oooo….that is nasty, we won’t let you do it, and we will find a way to stop you’ right from the get-go. They actually thought about challenging the regulators in court, so egregious were the violations of any sort of reasonable process, but in the long run the suits decided to save their money and went elsewhere.

      • Jim__L

        This is a tragic and stupid irony, considering how rich California is in petrochemicals and how long a history we’ve had of petrochemical technology development.

    • Suzyqpie

      Here’s some more lib fiscal idiocy
      Fairus dot org published a study on illegal aliens in CA. Data is from 2013. Estimates are that there are 3M illegal aliens in CA. They cost CA taxpayers $25.3B in education, health care, legal system expenses, et al. They return to the CA Treasury $3.5B in various taxes. That is negative $21.8B to the CA Treasury. That is fiscal insanity.
      We are told by politicians that illegals bring economic benefits???

      • Dale Fayda

        As someone else opined recently in another comment section of this site: “Liberal idiocy is a bottomless well.”

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