Return of $2 Gas Seen for Some in U.S. as OPEC Stands Pat

For the first time in five years, $2 gasoline is making a comeback in some areas of the U.S., just in time for the Dec. 25 Christmas holiday.
Retail stations scattered across the U.S. South and Midwest are about 20 cents shy of the $2-a-gallon mark. In New York, gasoline futures slid more than 13 cents Nov. 27 after OPEC failed to cut oil production to stem a glut. That decline alone could drag down pump prices by as much as 20 cents a gallon, Michael Green, a spokesman for the Heathrow, Florida-based motoring club AAA, said yesterday by phone.
“We could see the cheapest 1 percent of stations get within a few pennies of $1.99 over the next two weeks,” Patrick DeHaan, a senior petroleum analyst at GasBuddy Organization Inc., said yesterday by phone from Chicago. “We’ll see at least one station in the nation at $2 by Christmas. And that’s not really a prediction at all. That’s more like a certainty.”
The motor fuel has slid by almost a dollar a gallon in the U.S. from this year’s peak, giving Americans at least $500 annually in extra disposable income by IHS Inc. (IHS) estimates. The last time the country’s average gas price was below $2 was on March 24, 2009, while in the grips of the recession.
Gasoline futures sank below $2 a gallon this month for the first time since September 29, 2010. The average pump price was $2.792 Nov. 27, down 90.4 cents from this year’s peak of $3.696 on April 26 and the lowest since Oct. 8, 2010, data compiled by AAA show. The average has fallen for 64 consecutive days, the longest streak since 2008, Avery Ash, AAA’s director of federal relations based in Washington, said yesterday.

By Lynn Doan and Dan Murtaugh      Via Boomberg




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