Three-year low
Gas prices plummet, expected to stay low for months
Holiday travelers might be getting a Christmas gift this year in the form of lower gasoline prices.
On Thursday, the pump price for regular unleaded gasoline was reported at $2.08 at several locations in Marietta, and elsewhere in Ohio, gas was selling for less than $2 a gallon.
Avon and other Cleveland-area communities saw $1.79 gasoline on Thursday, the cheapest Ohio gas in nearly three years. Nine locations in Marietta were reported to have $2.08 gas.
The lower prices might be with us for a while, a senior analyst with the gas-tracking website gasbuddy.com said Thursday.
Patrick DeHaan said the declining prices could hold through February in the lower $2 range, with possible forays below that threshold.
The price of crude oil accounts for about half the retail price of gasoline, he said, and the surge in domestic production is one of many elements that has helped boost supply and dampen the price of gasoline.
“Certainly, in the context of the longer term, that’s why we have prices lower than they were in the 2011-2014 period,” he said. “Domestic production is so much higher now, more than 11 million barrels a day.”
Hydraulic fracturing has made previously unextractable oil available in the U.S., and as the technology has developed and streamlined, the shale oil has become less expensive to get out of the ground. Even as crude oil prices go down – West Texas Intermediate on Thursday was trading for about $51 a barrel – production continues.
“I wouldn’t expect production to drop much,” DeHaan said. “A lot of it doesn’t really have a high cost of operation, so $50 a barrel is still a pretty good price.”
Several factors have come about to influence the price, including the OPEC decision to curtail production at only 1 million barrels per day, fewer than expected, and waivers issued that reduced the impact of the sanctions on Iran, he said.
“Crude inventories have been rising since October, and refineries are at capacity,” he said. “That’s a good problem to have.”
Gasoline prices also tend to approximately track confidence in the stock market, he said, and the market recently has been jittery.
“Economic concerns translate into reducing driving and less consumption in general,” DeHaan said. “There’s a strong relationship, and recent signs of an economic slowdown have pushed the price of oil down.”
At the Speedway station on Seventh Street in Marietta Thursday, Darrin Fulton was tanking up his Jeep Cherokee.
“I’d say things are pretty good right now,” he said.
Fulton, a Marietta resident, said he wasn’t planning to travel over the holidays.
Nearby, Kristin Kidd filled up her GMC Terrain. She said she lives in Marietta but still has family in her hometown of Cleveland.
She said she’ll be traveling by air to Texas over the holidays and driving after she gets back to Cleveland, which has some of the cheapest gas in the country this week.
“Every time I talk to my mom she gets a little dig in about that,” she said.
Cost of a gallon of gasoline at the pump in Ohio –
Pricing elements:
•Taxes: 18 percent (national average).
•Marketing and distribution: 8 percent.
•Refining: 23 percent.
•Price of crude oil: 51 percent percent.
Source: Commodity HQ.
Tax on gasoline
•Federal excise tax per gallon: 18.4 cents.
•State excise tax, per gallon, in Ohio: 28.01 cent.
•State excise tax per gallon, West Virginia: 35.7 cents.
Source: American Petroleum Institute.