As gas prices climbed during summer, broadcast networks relentlessly supplied an onslaught of high gas price segments. But as prices plummeted, ABC admitted that its gas price predictions were wrong.
The Oct. 14 “World News with Charles Gibson” reported falling gas prices and finally told viewers its own forecasts of prices soaring even higher in the short term were incorrect.
“There is good economic news to report tonight that affects almost every American,” anchor Charles Gibson said. “It is the price of gas, which fell dramatically – down 33 cents a gallon in just the past week to a nationwide average of $3.15 a gallon. That’s almost a dollar lower than the high of $4.11 a gallon in July. The 33-cent price drop represents a savings to American drivers of about $125 million every day. The reason for all of this – Americans are driving less.”
As prices for all grades of unleaded gasoline and diesel fell [1], the inevitability of the $5-per-gallon milestone was put on hold, according to ABC correspondent Sharyn Alfonsi.
“Demand for oil has been falling sharply month after month,” Alfonsi said. “Just this summer, there was talk of $5 a gallon. Not anymore.”
To Alfonsi’s credit, she pointed out that her own network paraded analyst after analyst on ABC News programs, each making dire predictions.
“As oil prices skyrocketed this summer, analyst after analyst predicted the worst,” Alfonsi said.
Whether she intended to or not, Alfonsi showed how markets changed behavior, which in turn changed the market.
“But consumers put the brakes on their driving,” Alfonsi said. “World economies stumbled, demand fell and prices followed. Today, many analysts see the barrel as ‘half-full.’”
Andy Lipow of Lipow Oil Associates told “World News” the national average would reach $3 a gallon by Thanksgiving and would fall even lower after that. The downward trend will last for the next six to nine months, he said. The trend is also easing costs for struggling airlines.
“Soaring airline ticket prices are coming down too,” Alfonsi said. “This week, many carriers slashed fuel surcharges.”
Alfonsi noted that some industries have been reluctant to pass the savings of lower fuel costs along to customers, noting the volatility of energy prices. One of the culprits, according to the ABC reporter: OPEC, the oil cartel that is often ignored by the media, according to a Business & Media Institute report [2].
“But many other industries aren’t budging,” Alfonsi said. “From pizza delivery to trash pick-up, many businesses plan to keep the fuel surcharge on the bill, too unsure what prices might look like down the road. Many of the business owners that we spoke to today say the economy is just too volatile and they’re not sure these lower gas prices are here to stay. After all, next month OPEC ministers will meet. They could decide to cut production and that would send prices back up.”