Good News on Gas Prices: A Sharp Drop Is Just Ahead

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With security concerns in the Middle East receding and the bubble in commodities deflating, oil prices are headed sharply lower. Motorists will finally have something to cheer about: Gas prices should be about 25 cents a gallon cheaper in the next few days.

"My sense is we're going sharply lower in prices," says Tom Kloza, chief analyst of the Oil Price Information Service. "I'm not sure if it will be six days or 16 days, but six weeks from today, I suspect it will be $3.25 to $3.75 a gallon across the country."

Michael Lynch, president of Strategic Energy and Economic Research, a Winchester, Mass.-based consulting firm, says he expects gas prices to decline about 25 cents in the next week, with a target of $3.60 to $3.70 by Memorial Day.

According to the AAA, the current national average price for a gallon of unleaded regular gasoline is about $3.98, about the same as it was a week ago. A month ago it was $3.79.

A River Runs Through the Forecast


The one wrinkle that could still hold up a sharp fall in prices at the pump is the rising Mississippi River, which is flooding parts of several states, and threatens Louisiana between Baton Rouge and New Orleans. It's possible some refineries in the area might have trouble receiving oil shipments, but most analysts discount that issue.

"The market is pretty slack, so there are refineries that could come online and replace those affected by the floods," says Lynch.

The price decline is being driven by several factors. One is that the unusually high price in the last few weeks has itself caused consumers to cut back on driving. According to Lynch, demand for gasoline is down by 300,000 barrels a day, about 3% less demand than last year.

"That's a significant decline," Lynch says. "When you have this kind of run up, you do see consumers start to respond."

At the Top of an Annual Cycle

Kloza says that at the same time, the speculation in oil seems to have been cooled by investors' realization that there are adequate supplies.
"The truth is oil prices are very tidal, and there is always a high tide that tends to occur around May 5," Kloza says. "This year it was probably a little higher than normal."

Many investors were also expecting the turmoil in Libya to spread to Persian Gulf countries, notably Saudi Arabia after demonstrations in nearby Bahrain, but those upheavals didn't materialize. There have also been a series of unlucky setbacks at U.S. refineries, including power failures, storms and maintenance issues.

Kloza noted that the combination of problems drove up crude oil prices to $115 a barrel domestically and $130 in world markets. That number has recently come down by about $15 a barrel.

"It's more than a drift lower," Kloza says. "Once we get through this notion of possible flooding, it's sharply lower at the pump." The trend will be sharpest in California and other Western states which were the first to feel the sharp increases, he says.

Lynch says he expects to see gas prices sink lower throughout the summer and probably end it below $3.50 a gallon.

The sharp drop will be a help to hard-pressed consumers just as the summer driving season begins. It will also give a needed shot in the arm to the lackluster recovery, which has been dragging at least in part due to high energy prices.

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Dereck

Major Fraud Alert


The entire Federal Banking System under FirstGov has been "Consumed" and "Levied" by way of a Maryland State Circuit/District Court Ruled “Appropriation and Garnishment” of all Future Earnings prior to and after 2004 against Bank Of America by way of the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between the Dates of 08/04/08 and 10/09/09.

Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section: http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

The person they sued through a LLC. Debt Collection Company and Law Firm was the "World Fortune Owner" who "Counterclaimed" and won.

Now all Contracts of any Corporations (Including Employment) under the "Controlling Interest" of any Investment Bank Worldwide are "Null and Void", and are also under the stipulated Rules and Regulations of an "Closely-held S Corporation rendering all Employed under Legal Actions against “Domination”, and also means that "No Corporation can hold Shares" officially making every Stock Exchange on the Planet a "Ponzi Scheme" by default.

Businesses owned by the States (Public Corporations) are being sold Stock Shares by Corporations also under the Federal Banking System in this Worldwide "Ponzi Scheme". The World Fortune Company Merrick Inc. Sweden is dissolving Millions and Billions of Dollars from "All Levels of Government"in the U.S. of Financing based upon Years of "negligent inaction" involving this case.

The Federal Government has already been forced to discontinue supplying the Financing States use to pay their debts, Persons in Government Offices may want to begin to take their jobs more seriously, these are different times from 10 Years ago and you will not be accepted civil servants here just because you say you are here to do the right thing.

May 28 2011 at 11:48 PM Report abuse rate up rate down Reply
caohellsux1978

We at GolDAMN Nut Sachs, and Exxon/Mobil are proud to say we are defeating global warming one bankrupt driver at a time

May 27 2011 at 9:08 AM Report abuse rate up rate down Reply
ran41ca

All right, I've read quite a few of the comments posted here and I see some are pretty realistic, while others are rediculous and absurdly wrought with an infintile ego showing that the contributer thinks they have "the real answers!!" Well, I got news for those who defend, semi-defend the actions of uncle sham and any big business and especially the oil companies. "We the people" are simple pawns to the powerful and wealthy whether here or in another country and the big picture is to keep us all under their thumb!! uncle sham cares absolutely nothing for it's own people despite all the loud and flashy crap they present to us and the rest of the world as the mighty and powerful savior of the free world!! Our own govt and any big business and or the ultra wealthy are and always have been in bed together and their continual goal is to make as much money that is absolutely possible and they DO NOT GIVE A DAMN ABOUT WHAT SORTS OF GRIEF AND STRIFE IT BRINGS UPON AND CREATES FOR THE REST OF US, PERIOD!!!!!!! Those of you who choose to try and so-called read between the lines or feel like the loyal american need to wake up from the often self imposed daydream of patriotism and get your boneheads out of the sand!! As a so-called democracy WE THYE PEOPLE are supposed to have a say of what happens and what goes on concerning us but we don't! We are supposed to be able to vote and say what it is that WE WANT, not just exist and take whatever damn scraps uncle sham and his mangy ass cronies want to throw to us!!! Yes we have a voting system but it does us no good when the true wishes of THE PEOPLE are not heard and or conssidered!! The powers that be make very certain that all of "their agendas" and those of "their lousy cronies" are met above all and everything else and the fact that WE THE PEOPLE suffer as a direct result matters absolutely nothing to them!! This is the bottom line of it all so please those who choose to try and educate the rest of us with your rhetoric, please just save your dribble and try opening your eyes for a moment so you cans see that plate of sh&t that uncle sham has layed out for us all to feast upon!!!!

May 22 2011 at 2:07 PM Report abuse +2 rate up rate down Reply
Vinny

This was an excercise to convince the 'dumb-ass drivers' (that's us) that paying $3.50 a gallon is a bargain. I blame Obama for, as usual, sitting on his hands while all this is happening. I shouldn't be surprised because his policy is to give BILLIONS to Wall St and the Banking Industry and shaft the taxpayer any way he can. He is only partly to blame. The LOCAL GAS STATIONS like Quik Trip and BP are ripping off anyone that shows up while at the same time whining and lying about the profits they are making. I have vowed never to buy a single item from the Quick Trip stores, or from any gas station store because they are ALL rip-off artists. Don't ever believe the lie that they 'only make a nickel a gallon on gas'. That's a TOTAL lie because I've seen the invoices and the P&L sheets and believe me their profits are closert to $0.25 on every gallon they sell. Since when did any Corporation tell you the truth about anything ? They feel that a business license is a license to steal and rip people off and that's OK with the local business community, because 'everyone does it'. Don't EVER believe your local 'Chamber of Commerce' because they are funded by the Corporation they are supposed to monitor, so they too are in the 'rip-off the customer' business. Their name at least gives us some warning. Lets face it, the cards are stacked AGAINST the customer. My plan is to play their game too. I take advantage of any opportunity to 'get even' with the gas stations that rip me off. Whats good for the goose, is good for the gander. Have you noticed that useless Obama hasn't uttered a peep about the REAL reason that gas prices are so high. His bosum buddies on Wall St might get offended, also his Wall St staffers wouldn't like it. Get him out of office next year because he is THE CORPORATE PRESIDENT and nothing else.

May 22 2011 at 9:16 AM Report abuse rate up rate down Reply
DianeWNY

The Donald must have told them to lower prices

May 20 2011 at 3:01 PM Report abuse rate up rate down Reply
Welcome Bob!

its treason} most of the gas stations have been bought in the last year by a investors now they are so bold they dont care what they pay for it they charge what they want an screw us. they are out of control its like they got my check book
an are going wild with it. i own a small oil co the day after oil broke 100 a barrel i deleverd oil 35cents a gallon cheaper. gas was down 42 cents we havent seen a penny at pumps maybe even up a few cents i could write a book on the corruption its all specultion an greed . sometimes my price will go up 3 times in a day but has never came down in the day up to 15cent a gallon swings. i thing if they want to gamble thats fine do gold an things we dont have to buy to survive. i dont care if i dont have to buy it .let the gamble between themselfs we dont have to buy it.but iol gas beard milk food will distroy us.

May 19 2011 at 5:17 PM Report abuse rate up rate down Reply
WILLS

It may drop, but it will take awhile. It's all about what the retail stations have in their tanks and what the difference in re-fill price will be. Since they don't make a hell of a lot on the "per gallon", a rapid decrease will not be in the cards. While this sounds good, the damage is already done. The price has been up for months and it will now effect the delivery of all goods, the cost to produce and of course, an already straped consumer. The only avenue for John Q. Consumer is the credit card, at exorbitant rates, and the cycle starts over. The wizards of finance and the speculators that go with them have forgotten on thing - the price of that essential called food is also going to rise. Partly on the residual cost of high fuel, but mostly on the part of adverse weather. On average the U.S. citizen spends 10% of income on food while the rest of the world pays greater. I can only wonder how this will play out if our cost doubles? This is likely as most of the NorthEast is either under water or very wet which will at the least delay planting. The drought and fires are still at it in the South West and plant disease and weeds are on the rise for the last 3 years. All in all, looks dismal, regardless of the rosey USDA forecasts (which are always optimistic).

May 17 2011 at 6:45 PM Report abuse -2 rate up rate down Reply
1 reply to WILLS's comment
Vinny

That's all a pack of B*** S***. I've seen the P&L sheets of local gas stations and they get closer to $0.25 cents a gallon on the gas they sell. So don't lay all that 'isn't it great' B*** S*** on us and expect us to believe it. I don't know what your angle is, but your remarks are made up CRAP.

May 22 2011 at 9:22 AM Report abuse +1 rate up rate down Reply
kastmaster2105

Oil prices dropped by $17/brl. gas prices dropped very very slowly here. I guess any drop will help but its not enough. AND what is enough? I want it to get back to $1.39 like it was before the S*** hit the fan a while back. Speculation plays a big part and I do hope these "anti fraud" watchers are out in full force. Gas is $3.68 near Galveston , Texas now. Thats a mom and pops Pakistini bunch!! Some of those rag heads KEEP their prices HIGH and get away w/ it. What can a consumer do and who can we report the possiblity of fraud/gougers to. Whats gas cost in ur area? ed

May 17 2011 at 10:26 AM Report abuse +1 rate up rate down Reply
1 reply to kastmaster2105's comment
ran41ca

$3.65 a gallon here in utah still but in december it was at 2.35 a gallon!

May 22 2011 at 1:31 PM Report abuse +1 rate up rate down Reply
Robert & Lisa

How much you want to bet they won't drop as much as they went up? Thanks, Obama and thugs

May 16 2011 at 6:14 PM Report abuse +1 rate up rate down Reply
Jennie

Here in Green Bay WI we are still paying $4.04 or more a gal for gas an oil has been down below $114.00 barrel for over a week now. Can U tell use why gas goes down so slow when oil goes down, an when oil goes up gas goes up any where from .06 to .10 cents a gal. I just pray that one day an soon the bottom falls out an then we will be able to travel an do things to injoy the year. God Bless Us All.

May 16 2011 at 2:49 PM Report abuse rate up rate down Reply
2 replies to Jennie's comment
tj1108

Its summer gas. Do to Goverment emmission regulations the cleaner burning gas is put on the market just beofre the driving/vacation season. Thats why you see a sharp drop after vacation season. Less gas is going to be used and they can sell the cheaper to produce gasoline. If our Govt didnt regulate we would have 2 drastically different outcomes. First we would have gas at probably less than a dollar a gallon, but the large cities would have air pollution beyond belief.

May 16 2011 at 4:38 PM Report abuse rate up rate down Reply
Vinny

Only $4.04 a gallon ? You're lucky not to live in Georgia that just raised the price of gas $0.08 cents a gallon. I paid $4.14 last week for unleaded. Georgia has a Republican governor so anything the oil industry does is just fine with him so now Georgians pay much more for gas than ANY neighboring state. The South is going to hell in a handbasket because of the Republican governore that were elected by the Tea Buggers that elected governors that aren't qualified to manage even a s*** house. Take Florida as an example..... . Their new governor, (he owned the company that was fined $1.5 BILLION for ripping off Medicare) who, in my opinion, is well on the way to taking Fllorida back to the stone age. Arrogant and consumed by greed he has begun to treat Floridians as he treated federal taxpayers by being the CEO of a company that 'diverted' BILLIONS from Medicare. Since the law must threat corporations as 'people' they can't touch the corporate owners like Rick Scott so he claims that 'I DIDN"T DO IT' .....' MY CORPORATION IS THE CRINIMAL' . By law, he's right. Florida voters bought his line, so now they must PLAY HIS GAME for six years. A month after he was elected the voters found out, to their horror, Florida has no 'recall law' . They are stuck with what they bought.

May 22 2011 at 9:49 AM Report abuse +1 rate up rate down Reply