Supply rises, demand falls, pushing Oklahoma gas below $2 mark

BY JACK MONEY
Published: November 22, 2008

Many perhaps thought hell would freeze over before the price of fuel fell below $2 a gallon again.

No one has checked in with Hades, but as for the price of gas — it’s happened.


Gas prices are displayed at 7 Eleven on SW 59 near Pennsylvania on Friday. PHOTO BY SARAH PHIPPS, THE OKLAHOMAN

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AAA’s Fuelgaugereport.com, its Web site that tracks fuel prices, reported a national average for a gallon of gas on Friday of about $1.99 a gallon.

Fuel prices haven’t posted a national average that cheap since March 8, 2005.

In Oklahoma, the average price for a gallon of gas on Friday was about $1.78 a gallon. The last time prices were that cheap here was Jan. 28, 2005.

Reasons for price slide

Chuck Mai, a spokesman for AAA Oklahoma, attributes the falling prices to reduced demand, good supplies and falling crude oil prices.

"It’s impossible to know how low the price of gasoline will eventually go, but it’s a good bet that lower fuel prices will be the norm throughout the rest of the year and probably into early 2009,” Mai said.

Bruce Bell, chairman emeritus of the Mid-Continent Oil and Gas Association of Oklahoma, agreed with that assessment.

"This is a good thing, that we are able to pull the prices back down and deliver gasoline and diesel at a much more affordable rate,” Bell said.

"When gas finally got to $4 a gallon, that’s what did it, that’s what caused people to start driving less.”

Bell added, though, that Oklahoma’s oil and natural gas industry likely will be harmed with prices falling like they have been.

Mixed blessings

"I expect to see 350 or maybe even 400 rigs laid down during the next six months,” he noted. "The only reason we haven’t seen that happen yet is that there are a lot of longer-term contracts out there that are keeping the industry going right now.”


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Related Topics: Business, Financial Markets, Gas Prices, Trade, Oil Prices, Commodity Markets


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Greed caused all of this. This is obvious now that the price of oil was artificially manipulated earlier. Wars in Africa, hijacked tanker, OPEC saying they are going to cut back production.... yet the price continues to drop now...? But 6 months ago, even a freaking hint of a threat would force prices up, usually in record numbers. I hope the small few that made huge amounts of money are loosing their butts now.
Jess, Warr Acres - Nov 23, 2008 at 12:17 am
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Let's see..."someone" let gas prices stay ridiculously high for long enough to adversely affect the price of everything. So the vicious cycle began to cost many of us our jobs. We don't demand a supply of gas because we were laid off or our company closed and we have no job to go to. And with the pitiful unemployment compensation we are certainly not going to travel. Pretty simple economics.
Okie Girl, Southeastern County - Nov 22, 2008 at 10:17 pm
Should have driven a little further south. It's $1.42.
Susan, Oklahoma City - Nov 22, 2008 at 6:35 pm
Paid $1.54/gallon this morning for gas. Diesel was only $2.49/gallon. The other shoe will drop.
K, Oklahoma City - Nov 22, 2008 at 5:22 pm
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Thanks for verifying that, Floyd. You know there is always a spin! Wall Street is so busy trying to maintain even a glimmer of hope at this point that they don't have time to manipulate the gas market the way they had been. Greed kills. I'm loving the lower costs, but I hope we all remember to keep this from happening again by keeping Wall Street and politicians accountable for their actions.
Susan, Oklahoma City - Nov 22, 2008 at 1:46 pm
Wow, this is only the third time in a hundred years that fuel prices have fallen after being artificially increased. The price of fuel was due to market manipulation, an artificial demand based on speculation in the market. Just think of it. At the 150/bbl oil, news of a tanker being hijacked would have instantly put on another 5-6$ and made gas prices jump. Now it's just not important enough to move oil more than a few cents for a few minutes. Higher price drove people to buy more efficient cars and change the way of driving like it did for our parents and grandparents. The oil industry booms and busts, that is its nature. Been there, done that, got the t-shirt.
Doug, Midwest City - Nov 22, 2008 at 11:16 am
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Way to go, oil thugs - congrats for collapsing the world economy.
Gary, Oklahoma City - Nov 22, 2008 at 11:02 am
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In SW OKC last summer we would see up to 5 rigs at a time being built or worked on, For about a month, that was down to one full size drilling rig we could see. Now there are two. As I've said a few times before;unless the workover rig owners do not lower the prices they charge, prices of supplies don't drop,or the price of oil and gas doesn't go up, there will be a bunch of stripper wells shut in or maybe plugged, leading to even more dependence on foreign countries.By the way, on another topic last night on NDC Nightly News, a reported said a bad side of lower fuel prices would be the government would not have the tax money to rebuild roads and bridges. Had he checked, as I did with the Dept. of Energy, he would have found the federal tax per gallon is fixed at 18.4 cents per gallon and the states average taking 21.4 cents per gallon. He wanted to scare people I guess. So unless those taxes were dropped, and people kept using the same amount, the tax income would remain the same.
Floyd, Oklahoma City - Nov 22, 2008 at 9:06 am