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Remember when fuel prices were under $2? Those days are back.
GasBuddy.com says an OnCue convenience store in Oklahoma City dropped its price for a gallon of regular from $2.11 to $1.99 Wednesday, and it likely won’t be the only one. The fuel-price tracking site predicts parts of Spartanburg, S.C., Houston and St. Louis will have $1.99/gallon gas soon.
The national average is supposed to hit $2.55 by Christmas, with the lowest prices around the Gulf Coast. That said, the low price may hint at a bumpy economic road ahead.
75 Comments on “$1.99/Gallon Gasoline Arrives In Oklahoma City...”
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I filled up last night, $23, a year ago that ran about $40. I don’t care who lower gas prices are bad for, right now they’re good for me and I’m not feeling one bit guilty about it
+1. When I started driving seven years ago gas was hitting an unheard of $3 a gallon. I’m glad it’s running the other way, even if for a little bit.
When I started driving in 2002 (filling up my 5-cylinder 5000), gas was .98/gal.
I remember when it started spiking in 03ish, and I said “I’ll never pay more than $1.22, this is ridiculous!”
LAWL
I remember paying under a dollar, but that was in the early 90s, not the 2000s…
It was in SE Indiana, and not for a long time span, but I distinctly remember it.
I can still recall a brief period in 1998 or 1999 when gas was $0.69/gallon in southern Virginia. Even back then it seemed absurdly cheap.
I remember paying .35/gal in the early 60’s.
56belaire, that was high for the early ’60s. I drove cross country (San Diego to Boston) in ’71, and averaged 31 cents/gallon. It was an outrageous rip-off in NY (37 cents!) but the lowest in Oklahoma (26 cents). The sub-two buck gallon in Oklahoma isn’t typical nationally.
56BelAire, I grew up in Huntington Beach, CA, and got my very first drivers license at age 16 there.
Back then, my uncle on my mom’s s!de owned a Shell Service station and I spent many hours working there as a grease monkey.
Gas was 25c-35c for regular leaded with ethyl/methyl, and 35c-45c for hi-test premium 100 octane.
I sure pumped a lot of both, washed a lot of car windows, checked a lot of oil levels and thought a quarter tip was generous for all that hustle.
Times have changed.
In Atlanta in the late 90s, regular was in the mid-80s. Seemed astonishingly low, even then.
I suspect once the middle east is finished destroying Russia’s economy they are going to turn their attention back to the west and do the same to us.
So enjoy the low prices while you can but I wouldn’t suggest trading that Prius in on a Hemi.
“…they are going to turn their attention back to the west and do the same to us…”
The tail doesn’t wag the dog.
Then the middle east will rule the world and we’ll all be their slaves, don’t bet on it
Given differences in fertility rates and general cultural health and assertiveness, I wouldn’t bet against it, either.
You have to look at the culture of productivity in the middle east too. Corruption creates incredible inefficiency, to the point that most infrastructure in the region was built and is maintained by foreigners. Without the West, and cheap imported asian labor, the middle east is not far removed from the middle ages, culturally, politically, and economically.
Here’s a great article about the UAE and foreign labor, inefficiency, entitlement, and white expats.
http://www.vanityfair.com/culture/features/2011/04/dubai-201104
Over the next 5 yrs, the oil folks in the ME are going to find their new “bestie” customer is a country with mafia business practices and 1.5 billion expendable people to enforce them.
If they sold options on future quality of life in Saudi Arabia, I’d buy puts.
But it’s my right to drive the most inefficient car I can find. ‘Merica!
Of course diesel prices are still high and that probably won’t change any time soon especially since it’s heating season, or whatever excuse the oil companies can come up with.
It’s also my right to drive the same relatively fuel efficient vehicle I have been or buy an even MORE fuel efficient vehicle and really beat the system
The “Middle East?” It should be pretty clear that Saudi Arabia is more friend than foe. After all, they are the ones who crammed the “Continued Prduction down the throats of Iran and Venezuela, who aren’t so fond of us. But then, The House of Saud isn’t overly enthusiastic about Iran becoming nuclear. Nor are they excited about Iran fomenting terrorism around the region. The move cramps Iran’s style while sending a big FU to the Russians. Its a unique opportunity for the Saudis. They are also able to throw a wrench into the plans of the Obama administration to continue “conservation” efforts as CAFE becomes a real problem for auto OEMs and alternative fuel investment. Many high cost producers will become insolvent if these low oil prices stay in place for a while. One the other hand, other high cost producers could be run out of the market, leaving less competition once OPEC eases back on production allowing them to raise prices again. There is a reason OPEC doesn’t produce any more oil in 2014 than they did 40 years ago when they only had 5 members. They currently have 12 or 13. It ain’t about barrels, its about dollars.
Lower oil prices will strap a JATO pack to the U.S. economy and probably help the EU avoid a second recession. It could have an impact on the 2016 elections. An extended period of low prices could kill the Keystone Pipeline. If the global market price of oil stays “low,” the Canadian shale and sands production isn’t viable. No pipeline traffic equals no Keystone. I have failed to understand the “justification” for that project since OPEC has a decades long history of cutting back their own production to counteract any additional production elsewhere to maintain price equilibrium. The “Drill Baby Drill” crowd don’t understand petro economics.
AND cramping the Russians on revenue could keep them from cutting off supplies of oil and natural gas to Europe. The current sanctions are already causing them issues. They’ll need the money from EU sales more than they’ll want to make a statement to the EU.
It’s not just Saudi who are producing above quota. Nor is it likely much of a “master plan” behind it. The barely on top of things governments in most Opec countries don’t have a choice but to increase production to attempt to make up revenue lost due to lower prices.
As for Russia; if pressured enough, they can get back on their feet by fomenting war in the Middle East. Then make bank both off of higher oil prices, and arms sales; which are pretty much their only viable exports by now.
Back when “increasing production” in the West meant offshore mega projects with huge time horizons, Saudi could delay their implementation by ramping up uncertainty about future oil prices. And for the Keystone pipeline, they probably still can. But now, most growth in US production is from individually cheap and fast frackwells, who can be mothballed quickly when prices drop, only to be opened again as soon as prices rise. It’s a much, much more resilient infrastructure than deepwater wells in the Gulf or North Sea, or remote megaprojects like Prudhoe Bay.
Chances are Arabia, Russia, Iran and the rest have plenty more oil than previously assumed, tucked away in tight formations just waiting to be fracked as well. Making production above stated quotas less obviously poor resource management than would otherwise have been the case.
While I wouldn’t quibble about the possible political/economic effects of what the Saudis are doing, one thing often mentioned is the high cost of shale oil production, and that’s more assumed than proven.
Of course, cost of production is proprietary information, but there are reports that Bakken oil costs are as low as $32-$40/bbl, and likely to be lower in Texas’ Eagle Ford shale. The Spraberry Formation in Texas has a reported $14-$16/barrel cost, and an estimated 50 billion barrels recoverable.
Some people, even business analysts, might be looking at high costs of drilling a single well, $7-$10 million, as very high cost, but if it produces just a half million barrels over its 25-30 year life, the initial cost per barrel is $14-$20.
Entry into the oil business has never been cheap, but a producing well more than makes up for initial costs. Companies that get in trouble will likely be smaller operations with a lot of debt that can’t be serviced at lower prices. They won’t go bankrupt, they’ll likely be bought out by bigger, better financed companies for their leases.
If the Saudis are just going for the political and economic short term effects, they’re succeeding. If they’re trying to kill fracking or slow down American oil production with low prices, they’ll fail.
Mr. Ruggles. I know you have some experience in the auto industry, but when it comes to Oil & Gas, why not let someone in the Oil & Gas Industry educate you rather than writing about something you know little about.
1) You see no justification for building the Keystone pipeline stating that Saudi Arabia is more friend than foe and besides K.S.A. knows how to play petro economics. You do know that the Alaskan Pipeline was built because of the OPEC oil embargo of 1973? The Alaskan pipeline was built from 1974-1977 and has been supplying the USA with a continuous supply every day since.
2) Fracking and Directional Drilling have opened up huge gas reserves, which now are used for heating and power generation. (I was a GE Gas Turbine Controls Field Engineer, putting up power plants that burned natural gas.) This has cut the need for importing oil from people who do not have our best interest at heart and kept hundreds of millions of dollars here in the USA.
3) How is having another pipeline a problem? As of right now, it is for export, but who knows what its use will be 5-10 years from now. Electricity production was only for lighting. Refrigerators, Air Conditioning, TV’s etc. all came afterward as people invented uses for it. I will hazard a guess the same will happen with the pipeline.
4) It has been some time since I worked at Shell Mining, sold to Ziggler in 1990’s. I was told the US had 4 times as much energy in coal than K.S.A. had in oil. Still think coal is a bad idea? Maybe research needs to be placed into gasification or inexpensive pollution controls, but 4 times what Saudi Arabia has is a hell of lot of energy.
5) Don’t get me started on global warming. How it is that we had ice ages in the past, then the earth got warmer to melt the ice, all without the help of mankind burning fossils. Care to comment on that?
Last I checked, there were 2 overriding reasons why we’re seeing gas prices plunge:
– Sanctions and an attempt to punish Russia for its military incursions is clobbering their economy, as they rely heavily on oil exports.
– The Saudis and other big oil producers wanting to crush competition stateside from oil shale.
This won’t last for the long run.
God bless ‘murica! Where’s “Big Trucks” when you need him?
Can’t hear you, too busy stompin commies and driving real fast and getting pulled over but never tickets because he is black and cool.
Those liar loans ain’t gonna originate THEMSELVES, yo.
I’m going to wait until gas is back above $4 a gallon (within 18 to 24 months) and then buy a 2014 Escalade with 17,000 miles on it for $28,000 – just because.
…just because you like the gauge cluster, you don’t fool us
I’m actually going to part it out, but save the gauge cluster to transplant into an ATS.
I wish Land Cruisers/LX had this sort of price drops.
Not gonna lie, the 2007-2014 Escalade has the most beautiful gauge cluster I’ve ever seen.
Gas Buddy has Costco gas at 1.009 CDN a ltre = .87 cents U.S.D. 3.78 litres = 1 US gallon. .87 X 3.78 = 3.28 USD for US gallon. Is my math flawed, or are we paying well over a 1.00 more than the USA ?
Well, sometimes it sucks to be Canadian
Despite the tar sands existing, Canada still really gets shafted on fuel prices. Come to the US and A. Cheap fuel prices and hit and miss health care are waiting for you.
Not to mention a nice house near a major urban center is aboot half the price (California excluded)with deductible interest on the mortgage
I love deducting my interest! College loan interest deductible as well.
Deductable interest raises housing prices. Which is great unless you are a first-time buyer. Or if you are selling and need a first-time buyer to be able to afford your home.
Despite the initial turmoil (market correction), we won’t miss the deduction once it’s gone.
Bunkie,
The deduction is of dubious value for a lot of people. Many people don’t have enough deductions to itemize, even after including the mortgage interest deduction. Many others end up with itemized deductions which barely exceed the standard deduction. But they paid a lot of interest to get their itemized deductions to exceed the standard deduction amount.
Ergo, in a rational market, I’m not sure we would see a huge correction if the deduction were eliminated, especially at the mainstream price level.
@Corey
Only until about 60K then it begins to phase out until no longer deductible at 70K, with a max deduction of only $2500 (student loans not mortgages). I have this argument every year with the tax women and then shake my fist to the sky while cursing the progeny of the illegal revenue service, its become quite a tradition.
Well we’re about the same age, so if you’re at 70k/yr you’re doing alright! ;)
I just checked, and my total student loan interest last year was $500.59.
We can’t deduct our interest. We also don’t pay capital gain when we sell our principle residence
On the week of November 25, the average price of regular in Canada was C$1.14 per liter, which converts to US$3.784 per US gallon.
During that same time period, the average price of regular in the US was $2.821. So no, you’re not imagining it: that’s a spread of US$0.963 per gallon.
Canadian fuel is expensive (I know this directly from going to BC a few times a year, often far enough in and with my truck that I need to fill … and lemme tell you, it’s *not fun* filling a 38 gallon tank at summer BC prices).
Taxes, yo.
How do the fuel taxes compare USA vs. CN?
In Canada, there is wide variation between province, so the tax portion can be anywhere from $0.20 to $0.50 per litre. I think the national average is somewhere around $0.40, which is about $1.50 per US gallon.
In Canada the majority of the cost of gas goes to taxes.
If we were serious about destroying Islamic radical terrorism we would convert ASAP to non-petroleum based fuel and energy. Without the cash flow from petroleum the Middle East would revert back to its historical role as a barren backwater.
So in a round about way could you blame the purchasers of large trucks, energy hogs, etc for supporting terrorism>
Yeah, and we’d also send our unicorn-pegasus armies to defeat them.
There isn’t anything to replace petroleum for transportation, not at a price anyone’s willing to pay, not at the level needed to “destroy Islamic radical terrorism”.
Remember also that “consumer gasoline” is maybe 1/3 or so of US petroleum use (http://www.eia.gov/forecasts/aeo/mt_liquidfuels.cfm) – the diesel use is mostly transport; rail and trucks. Those … do not do very well with “just don’t use petroleum!”.
(Electrics? Well, I’d love to see a thousand new nuclear plants built, but it ain’t happenin’.)
Between the non-Islamic-world production boom and the way economic recovery in the rest-of-the-world will pump demand back up, there’s no sane way to blame “big trucks” in the US for” supporting terrorism”.
Those prices should include an asterisk explaining it’s for adulterated (E10) gasoline. The real stuff runs about 20 to 30 cents more. But the mileage is better.
More like 40 cents. While the average price here in Tulsa (as of last night) is about $2.45 the cheapest 100% gasoline I’ve found is $2.85.
Anywho, no matter the extra cost I will run pure gasoline in my fuel sipping Mazda2.
+1. Only one station in fifty miles sells real gas, but I don’t get up there as often as I would like. Their pricing was closer to sixty cents more though.
Lower oil prices won’t help hybrids and EVs. If there are indeed 3K Teslas parked somewhere, that situation will get worse rather than better.
Isn’t it clear that all of the increased production in the U.S. hasn’t helped lower oil prices until now? Why? Until now, OPEC just curtailed its own production to counter the increased production elsewhere to maintain a favorable price/production equilibrium for themselves. But every few years OPEC allows a glut for their own purposes. That’s the purpose of a cartel. They ARE the low cost producer. They could run many of their competitors out of the business if they wanted to, leaving the market mostly to themselves after a while. Our country’s problem is NOT our dependence on foreign oil Our problem is our dependence on the world market price of oil controlled by a cartel.
How many people that buy Teslas actually have to be concerned about the price of gas? They are a lot of other reasons to buy an electric other than saving money on gas. Many of us, including myself, like them for the quiet, smoothness, and the instant torque. How many Model S P-85D orders will be cancelled because gas is now cheap? I’m betting none.
BTW – The Leaf had a record month in November. That surprised me.
My Leaf passes every gas station.
My Optima Hybrid gets mid-30s to mid-40s mpg.
My household fuel consumption has dropped by 50% since 2012, while driving the same miles.
So I don’t really car about the price of gas, for my cars, anyway.
@ Ruggles: People typically don’t buy Teslas to save on gas, and believe it or not, the Leaf is setting sales records. The Leaf driving experience is great, and the reliability and low maintenance are also very attractive benefits of an EV.
The cars whose sales will suffer with low gas prices is the Prius and the Volt, because they still need gas. Volt sales are in free fall, but the ‘experts’ blame it on the new model arriving soon.
From the standpoint of long term thinking, we should oppose, not support, US energy independence. We should use up everyone else’s oil while reserving our own. Then we will hold the reins.
Unfortunately that strategy will not work because until then, they profit and use those profits to invest in other nations (real estate, oil exploration, etc).
You need to first deprive them of their main source of income.
Test
It’s a bit of a PR stunt. Spot market prices of gasoline when taxes are thrown on top are over $2 a gallon everywhere. At $1.99 they’re selling at a loss – look at the difference in the price of diesel on that sign. I’d also like to see the price of mid-grade and premium, which I expect is much higher.
You can’t change the laws of supply and demand, and there is no magical gasoline fountain in Oklahoma where commodity price for a gallon of gas is around $1.30 or $1.40.
Good for grabbing headlines.
Gas now well under $3 a gallon in the USA. Now is the time to end all government subsidies on gasohol, a product that never lived up to what the politicians and ADM said it would be or become. It was a sham from the get go , but made millions of dollars for a handful of crooks. Second , Now is the time to raise federal gas taxes to the tune of an additional 10 cents a gallon and maybe after all the skimming and graft , they’ll be enough left over to fix some bridges a highways. States too should raise their gas tax 2 or 3 cents a gallon. Don’t hold our breath , when was the last time a Politian did the right thing? Voters are stupid and short sighted , Politian’s know this all too well. Will we screw ourselves in the long term just for some “cheap” gas now? Probably.
When was the last thyme speling and gramer wuz consistant?
Ugh, it killed me a little bit to type that sentence.
What r you , a grammer Politian?
A burgeoning copyeditor.
“burgeoning”
Some time at the gym and a little closer attention to what you eat should take care of that for you.
Not literally…! :P
And I just lost 10 pounds in 2 weeks thanks to a bout of irregularity.
You didn’t loose weight, just a lot of crap
That’s true, but it’s also true that crap has weight. Ergo…
[Disclaimer:Drzhivago138isnotarealdoctor.
Consultyourphysicianbeforebeginninganyweightlossregimen.]
Indeed, our fuel got very inexpensive. Too bad I can’t partake. The disparity between gasoline and diesel is not usually that high, though.
Enjoy it while you can.
I fully expect gas prices to rebound to $3/gal by mid-February, at the latest.
Care to bet on that – over $3 a gallon national average by 2/15/15.
Rising dollar + reduced demand in US + economic slowdown in Europe and Asia = lower oil prices
Oil has been overpriced, largely due to QE, and it is returning to equilibrium. Betting on a surge in fuel prices is a poor bet in my estimation.
(The national average price of gas is nowhere close to $2, though. As of 12/1, it was $2.78 — $2 gas at today’s prices is a loss leader, not a market price.)
Boys and girls, the oil boom is over Rover just like back in 1983. This time it was fracking that killed it. Not only did she leave town, she called you a sorry SOB on her way out.
Traditional suppliers are screwed. High cost suppliers (including some frackers) are utterly screwed.
@jimbob457,
Here’s a sobering link regarding the US oil and fracking business.
You are correct I don’t know how much longer some of these guys can hold out for.
http://www.smh.com.au/business/mining-and-resources/oil-below-us50-a-barrel-its-already-there-in-north-dakota-20141204-11zxjp.html
Not yet, but almost time to head back down to the old Oil Patch and get some great deals on rust free old cars, from motivated sellers.
Tried that back during the oil bust in the early 90, came home with a lovely Karmann Ghia convertible for $2500, from an eye doctor in Tulsa with a garage full of Porsches and more girlfriends than his wife could ignore.
How much of the new 1.99 is a percentage of ethanol cost alone?
I also like how diesel is still 3.39 despite the fact diesel is cheaper to refine…
At $2 per gallon, they’re losing money. (Not that this is far from the norm: US gas stations often barely breakeven on the fuel, and make their profits from the convenience store.)
The refining costs don’t vary for the fuels — the refinery is set up to crack particular ratios of gas, diesel, jet fuel, etc., and the overhead allocated across the board.
The supply and demand component of gasoline comes largely from motor vehicle drivers. The supply and demand component of diesel is more closely related to the business cycle, including transportation and agriculture.
Americans are demanding less gasoline than they used to, while the economy is recovering. If we are burning less gasoline but buy more goods because of the recovery, then gas demand will naturally follow a path that is different from diesel.
If the Saudis are hoping to impact anything, then I would expect that they are hoping to move the demand curve moreso than attack supply. If lower prices convince Americans to buy more gas guzzlers, then KSA will have scored a victory.