April 23, 2013

Oil, gasoline prices fall sharply, lifting economy

Prices at the pump could drop another 20 cents a gallon over the next two months, analysts say.

The Associated Press

(Continued from page 1)

click image to enlarge

Gasoline prices are shown in Montpelier, Vt., on Friday. Prices have fallen by 28 cents per gallon since Feb. 27.

The Associated Press

 

 

Lower energy prices also give potential customers more money to spend on air travel.

Airlines aren't ready to celebrate yet because the relief could prove to be short-lived, says John Heimlich, chief economist at Airlines for America. "It looks promising but we're not counting our chickens," he said.

Political turmoil or refinery problems could crop up at any time. Analysts are particularly worried about the transition of power in Venezuela, a major oil exporter, after the death of President Hugo Chavez. Violence has erupted in the wake of a closely contested election, and the financial situation of the country is precarious. Analysts worry that the country's oil production could slip.

Also, refinery maintenance in the Midwest is already affecting prices there. Drivers in Ohio, Michigan and Indiana are paying only slightly less than they did last year at this time, and prices there have been creeping up over the last couple of weeks.

Gasoline prices reached a high this year of $3.79 per gallon on Feb. 27. Last year's peak was $3.94, and it came on April 6; last year's low was $3.22 on Dec. 20. The average price for all of 2012 was $3.63 per gallon. The Energy Department forecasts the 2013 average will be $3.56.

Analysts say there are limits to how far oil and gasoline prices will fall. Countries in the developing world are still growing fast and pushing world oil demand higher, perhaps to a record this year. And if oil prices fall too far drillers will be forced to cut production to try to stem the decline.

That means Mike Mitternight, the small business owner in Louisiana, won't likely get his wish: He'd like to see gasoline prices between $2 and $3 per gallon.

"I still think it's high and we could bring it lower," he says.

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)