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Oil Production Up, Gas Prices Down

How Long Will It Last?

By Joe Benton
ConsumerAffairs.com

October 10, 2006

• Gas Prices Head Lower as Economy Slows • Gas Price Declines for 9 Days • Gas Prices Continue Downward Trend • Oil Prices Surge By Record $25 a Barrel • Gas Prices Drop for 5 Days • Price-Gouging Probes Spread to 6 States • Investigations of $5 Gas in North Carolina, Florida, and Virginia • Shortages, Price Hikes Follow Ike in Southeast • States Investigate Gasoline Price Gouging Claims • Pumping More U.S. Oil Won't Lower Prices, Consumer Group Says • Oil Prices Fall, Gas Prices Surge • Gas Prices Slide 8 Percent from Record --- • More ...

OPEC threats to cut production in a effort to prop up oil prices seem to have gone away for now as Saudi Arabia is advising refineries in Europe and Asia that there will be no reduction in oil output next month.

The Saudi decision will maintain some downward pressure on international prices that could keep gasoline prices in the U.S. heading down as well.

Oil industry analyst Trilby Lundberg, however, is warning that a return to increasing gasoline prices is not far off and may already be underway.

"With much lower prices, demand can be restimulated. This points to the end of the price crash coming up soon," she said.

"Prices to wholesale distributors in much of the middle of the country from the Gulf Coast have been rising already, so there is a turnaround evident in certain wholesale markets already," Lundberg said.

The national average price for a gallon of regular unleaded gasoline is now $2.26, according to AAA, of Hawthorne, Florida. One month ago the average price stood at $2.61 a gallon. One year ago a gallon of regular cost $2.89.

Gasoline prices are down almost 75 cents in two months. The national average price for a gallon of midgrade gasoline is $2.40. Premium gasoline is selling for an average price of $2.49 a gallon.

For the year gasoline prices peaked on August 11 during the height of the summer driving season at $3.02.

One gasoline station in Staunton,Virginia is selling the cheapest gallon of regular in the country at $1.79. The highest price is still found in Hawaii at $3.39.

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