US Gas Prices Hit 5 ½-Year Low Of US$2.47 A Gallon

Dec 22, 2014 03:33 AM EST

(Photo : Reuters) lls Church, UNITED STATESA taxi passes a gas station in Falls Church, Virginia December 16, 2014. For the first time in more than a decade, U.S. gasoline prices are tumbling toward $2 a gallon even as the economy grows and unemployment shrinks, a constellation that will test the theory that domestic fuel demand is in terminal decline.
Conventional wisdom holds that structural changes such as increased fuel efficiency, greater urbanization and a graying population that have taken hold since the financial crisis will temper any potential pick-up in U.S. fuel consumption next year, despite the unanticipated arrival of half-priced fuel.

REUTERS/Kevin Lamarque (UNITED STATES - Tags: ENERGY BUSINESS)

The continuing drop in the price of oil in the international market gave American motorists an advanced Christmas present as price of regular-grade gasoline went down to a five-and-a-half-year low of US$2.47 per gallon.

It decreased by 25 cents, according to the latest survey of Lundberg dated December 19. With this latest decrease, that means gasoline prices has gone down by more than US$1.25 per gallon since May.

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Trilby Lundberg, publisher of the survey, said that motorists could expect pump prices would further be cut by a few more pennies, Reuters reports.

Among the 48 states covered in the survey, motorists in Long Island pay the highest at US$2.82 per gallon, while those in Tulsa enjoy the lowest at US$2.06.

U.S. crude futures had tumbled down for four consecutive weeks and in 11 of the past 12 weeks, while crude prices decreased 14.2 percent in the last 14 days but went up by 5.1 percent to US$57.13 per barrel on Friday.

But on Monday, oil prices improved to above US$62 per barrel.

On Sunday, at the energy conference in Abu Dhabi, Saudi Arabian Oil Minister Ali al-Naimi blamed the spiraling down of oil prices on non-members of the Organization of the Petroleum Exporting Countries, specifically their lack of coordination as well as speculation and misleading information, reports Nasdaq.

Since the OPEC's decision to retain its oil production levels on November 27, oil prices have been on a downward trend. Until the end of 2015, absolute energy prices are expected to remain low, forecast KBC Energy Economics, which would surely be felt and appreciated by the traveling public, both motorists in terms of lower pump prices and commuters through lower transport fares.