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Gas Prices Keep on Dropping ... For Now

Government Report Warns of Increasing Demand

By Joe Benton
ConsumerAffairs.com

September 12, 2006
Gasoline prices continue to head down with a gallon of regular self-serve selling now for $2.50 or less in 14 states.

The average price for regular unleaded gasoline has dropped 7 cents in four days with the nationwide average now sitting at $2.61 a gallon, according to AAA, of Hawthorne, Florida.

One month ago, regular unleaded sold for $3.01 a gallon.

Midgrade and premium prices also are falling too. Midgrade is down 7 cents and now sells for an average of $2.78 and premium is down 8 cents and sells for an average of $2.87.

The average price for a gallon of diesel fuel is now below $3 at $2.97.

A station in San Diego wins the weekly prize for the most expensive gallon of gasoline in the country selling regular self-serve for $3.59.

Gasoline can be found in Springdale, Ohio for $2.03 a gallon. That is the lowest price in the country.

In Washington, DC, the Energy Information Agency predicts gasoline prices of $2.55 a gallon by January before climbing again next spring.

The EIA estimate is based on an expectation of rising demand with only a limited increase in supply. According to EIA, worldwide petroleum consumption should grow by about 1.2 million barrels a day in 2006 and 1.7 million barrels a day in 2007. In 2005 the world used about 84 million barrels of oil a day.

EIA forecasts oil production capacity will increase only slightly in 2007, all of which will come from Saudi Arabia.

"Because only limited increases to surplus capacity are expected during the forecast period, existing and potential supply problems throughout the world will continue to raise concern," the report stated.

"Because of these factors, as well as the continued tight supply-demand balance, EIA expects little relief from current pricing patterns."

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