In all the media’s economic fearmongering, exaggerated predictions are rarely corrected. And when it comes to gas prices, exaggerated predictions have become the norm.
Media analysts have long warned of prices exceeding $4 for a gallon of gasoline. But that’s not what the market is dictating now. The price for a barrel of oil has fallen well below $88 a barrel [1] in recent days. According to a February 6 Reuters report [2], gasoline could fall as much as 50 cents a gallon by the spring.
On the NBC “Today” show Nov. 8, 2007, CNBC “Mad Money” host Jim Cramer told Meredith Vieira gas prices would hit $4 a gallon [3].
“I still like oil,” Cramer said. “I think oil goes a little bit higher. It is monster. You'll be paying at the pump. You'll be paying $4 [a gallon] within the next six weeks.”
Before Thanksgiving 2007, CNN “American Morning’s” Alina Cho called the spike in gas prices “highway robbery.” She also said quoted experts predicting “we could be looking at $4-a-gallon gas as early as the spring.”
On January 8, the Energy Information Administration predicted gas would go to $3.50 a gallon [4] before June.
Now that prediction is looking unlikely. According to the EIA’s latest report on February 4 [5], the national average price of regular gasoline is $2.97 per gallon and trending downward.
Why the drop? The PBS “Nightly Business Report” explained oil and gas inventories came in higher than expected for the week ending February 1.
“[C]rude supplies climbed by 7 million barrels last week, roughly triple the increase expected,” PBS correspondent Erika Miller said. “Gasoline and distillate supplies also rose.”
Media grumbling about gas prices has subsided for now, but the lower prices and forecasts have gotten very little attention.