Gas Prices Could Plunge in Next Few Weeks

by Nate Wooley | October 22, 2012 12:40 pm

It’s becoming increasingly possible that gas prices could finally go down. While that might not be good for Exxon Mobil (NYSE:XOM[1]), Chevron (NYSE:CVX[2]) or BP (NYSE:BP[3]), it should be good for consumers.

The nationwide average price for a gallon of gasoline, $3.86 just a few weeks ago, could fall to as little as $3.35 or lower[4] soon. Prices are below $3 in some regions already and could drop further.

A shortage of supply and some issues at refineries around the country have combined to keep prices high all the way through the summer and into fall, defying the usual Memorial Day peak. But analysts now think that higher supply and the subsequent drop in wholesale prices lately will bring the cost of a tank down significantly in the next three weeks.

The wholesale cost of a gallon of gas has dropped from $4.35 down to $2.71, and while pump prices can lag, they generally follow the wholesale price fairly closely.

More on oil and gas prices:

• September Consumer Prices Rise on Higher Gasoline[5]
• California Gas Prices Spike on Supply Disruptions[6]
• Oil Prices Below $90, But For How Long?[7]

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