With the holiday coming, there is a big reason to give thanks after all. Consumers can celebrate that gas has dropped below $2 for the first time in years. That marks a fall of more than 50 percent since July 15 when gas hit a high of $4.11.
The current [1]nationwide average is just $1.989, according to the Oil Price Information Service. That price has been falling steadily since its high. Gas dropped below $3 a gallon for unleaded regular just a month ago on Oct. 20 and below $4 on July 28.
The price drop is even more remarkable when compared to previous years. Gas was $3.087 a year ago. In 2006, it was close to its yearly low on this date, hitting $2.233 per gallon.
The decline in gas has mirrored a similar drop in oil prices. Oil hit its high at $147 a barrel on July 11. Yesterday, it closed at $49.42, “the lowest since May 2005,” according to Bloomberg.
“The International Energy Agency, an adviser to 28 nations, said last week that world oil demand will rise at its slowest pace for 23 years in 2008. It cut its 2009 estimate by 670,000 barrels a day to 86.5 million barrels a day, the biggest reduction in 12 years,” Bloomberg added.
High gas prices and even higher predictions have been a media theme throughout the last several years. But as prices plummeted, [2]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 [1]all grades of unleaded gasoline and diesel fell, 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.”
Other media outlets have hyped even higher predictions for gas. In 2007, as gas again passed $3 a gallon, the [3]media fear machine was predicting much higher prices.
As far back as two years ago, NBC was also talking about $5 gasoline. On the May 20, 2005, “Today,” reporter Carl Quintanilla asked the audience to picture a scary future. “Imagine a world with $5 gasoline. What would you do?” he asked.
[4]This year those predictions grew louder. Robert Hirsch, Management Information Services Senior Energy Advisor, gave a dire warning about the potential future of gas prices [5]on CNBC’s May 20 “Squawk Box”. He told host Becky Quick that the problem was so enormous no single thing would solve it.
“[T]he prices that we’re paying at the pump today are, I think, going to be ‘the good old days,’ because others who watch this very closely forecast that we’re going to be hitting $12 and $15 per gallon,” Hirsch said. “And then, after that, when oil – world oil production goes into decline, we’re going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we’re not going to be able to get the fuel when we want it.”