Some Analysts Predicting Oil At $50 Per Barrel Due To Shale Boom
The price of regular unleaded gas continued its months-long tumble to settle at an average $2.78 per gallon, according to the latest weekly price survey from the U.S. Energy Information Administration. The E.I.A. report also shows diesel prices continued their price drops during the past week, with the nationwide average coming in at $3.60 per gallon. On average, American drivers are paying about 93¢ per gallon less for gas than they were just six months ago, which translates to $13.95 of savings for every fill up of a 15-gallon fuel tank.
Regional Prices Continue Falling At Different Rates
Gas prices around the country still vary widely by region, however, with the West Coast continuing to tally the highest prices in the country. Even so, for drivers from California to Washington State, the average price of $3.02 per gallon is welcome relief after a summer in which prices were regularly well above the $4.00 mark. The lowest prices in the country continue to be found in the Gulf Coast states, where the average price is now about $2.53 per gallon, but some stations near Austin had gas for less than $2.50.
Crude Oil Leading The Way To Lower Prices
Meanwhile, the price of fuel is expected to keep falling as it follows the trends in crude oil futures. Domestic crude, West Texas Intermediate, is now less than $70 per barrel to its lowest point in over five years. As WTI goes, so goes Brent Light Sweet Crude, which is also trading just above $70 these days. The reason is, of course, the U.S. shale boom, which has produced a much larger crude oil surplus than originally expected by both drillers and refineries.
Michael Yoshikami, founder of Destination Wealth Management, told CNBC Tuesday it was not unrealistic to think domestic crude could fall as low as $50 per barrel. Another oil market analyst, Olivier Jakob of Petromatrix in Zurich, said Brent could still trade in the $60-$70 range, like WTI does currently, particularly if the U.S. supply remains high and overseas producers continue their high level of output.