It’s been about four weeks since my last price check at the pump: Gas Prices Expected To Remain Lower For Longer. The average price for a gallon of regular gasoline across the U.S. was hovering at around $2.00 per gallon. Knowing another time when prices were more than double this amount, most of us thought that was a smoking deal.
Fast forward to today, and gas prices have fallen an average of almost 30 ¢ over the last month.
Retrieving data from GasBuddy.com, the current and previous price stats for a gallon of regular gasoline in the U.S. are:
One Week ago 1.782
One Month ago 1.973
One Year ago 2.183
This week after week slide in gasoline prices are almost starting to look like the Walmart falling prices happy face. While these falling prices may be good for consumers and motorists, they are most often not good for investors. Most consumers and motorist are not aware of the economic challenges that have been created for others and possibly another wallet that they may own, e.g. stocks and 401-K accounts.
Kurt D. Brown, a contributor for Oil Pro, reminds us that Nothing lasts forever, and that includes this economic downturn with Oil & Gas! There has been significant job losses during this oil and gas downtown. From field technicians to safety people and office staff. Geologists, surveyors and vendors have all been hit and hit hard by this downturn.
While many consumers are happy about the lower prices at the pump, this downturn goes way beyond that. The stock market, economic upheaval, business closing or downsizing are all part of the chain reaction. Most consumers don’t see the backside of these falling prices when they raise the fuel nozzle to fill their gas tanks.
Depending on where you live in the U.S., gasoline prices are even cheaper, and may soon dip below $1 per gallon at some stations in the Midwest, according to Nathan Bomey of USA Today. [Ref 1] Real or Unreal? This is putting the price of unleaded fuel in the same category as a pack of gum or a bag of pretzels from the vending machine. We haven’t seen gas prices this low in over 12 years, so it is almost unbelievable to me.
USA Today reports that 2015 was the year that job gains in the energy sector came to a screeching halt as rock-bottom oil prices triggered layoffs of more than 258,000 workers globally, according to a comprehensive analysis by industry consultant Graves & Co. [Ref 2] Unfortunately, more job cuts and bankruptcies are expected in 2016, analysts say.
For me, an even more interesting observation are the actions or lack of actions on the part of the oil producing and exporting countries. OPEC is apparently gearing up for a repeat of its 2015 strategy, i.e. continue pumping with no cap on its production ceiling. Less revenues from oil and gas have certainly put pressure on other oil exporters like Brazil, Venezuela, Russia, and we can now add Iran to the mix.
In a future post, we’ll take a deeper look at the impacts of this down-turn on the industry and the negative impact on economies of a few oil-exporting countries.
Until then, happy motoring!
1. Don’t look now: $1 gas may be close, by Nathan Bomey for USA Today, February 9, 2016, http://www.usatoday.com/story/money/2016/02/09/gasoline-prices-2016-crude-oil/80061164/
2. More job cuts expected for oil workers in 2016, by Nathan Bomey for USA Today, January 8, 2016, http://www.usatoday.com/story/money/2015/12/31/energy-oil-gas-us-jobs/78066610/