Gasoline prices in the United States are dropping in sync with the continued slide in global oil prices this past month. Gasoline prices on Columbus Day dropped to $3.20 per gallon, their lowest for the holiday in four years.
The price of regular unleaded gas has dropped steadily since June, but saw a particularly sharp drop over the last month. Columbus Day’s average price is 9 cents less than one week ago and 20 cents less than one month ago, according to a AAA report. That price could drop below $3 per gallon, according to Tom Kloza, chief oil analyst at GasBuddy.com.
Brent oil and West Texas Intermediate blend prices both dropped more than 4 percent on Monday. Oil prices slid through the floor because of the International Energy Agency’s low projections for demand in 2014 and 2015, high expectations for U.S. shale output and high production from OPEC countries. Brent crude predictions for November dropped to $85.04 per barrel and U.S. crude dropped to $81.84 per barrel.
Kuwait’s oil minister said crude could fall to as low as $76 per barrel, while Saudi Arabia told oil business leaders that they are comfortable with oil dropping to $80 per barrel. Experts said OPEC members are likely in disagreement about how to handle dropping prices. Saudi Arabia may be shifting its strategy from keeping Brent prices above $100 a barrel to maintaining a certain market share, according to Jeff A. Dietert, head of research at Simmons & Company, an investment bank.
Low prices at the pump mean consumers will have more money to spend after filling up this year. Americans are likely to spend that extra cash on food, clothing and upcoming holiday festivities, according to U.S. News & World Report. The prices are expected to continue to drop through the end of the year, the report said.
“Whether it’s a conscious decision or not, that money bleeds into the economy,” Ellen Zentner, the author of the AAA report, said.