New York: Just as Americans are starting to hit the road for the holidays, the average price of petrol at the pump has dropped below $2 (Dh7.34) a gallon for the first time in more than six years as crude oil production continues to surge.
The average pump price fell to $1.999 a gallon at about 4pm. New York time on Saturday, according to data from GasBuddy Organisation, a price tracker based in Gaithersburg, Maryland. That compares with an average price of $2.11 a month ago and $2.44 one year ago.
Low oil prices tied to overproduction and to lower seasonal demand are “the main catalyst” for the decline, said Patrick DeHaan, a senior petroleum analyst at GasBuddy, in a phone interview. “America is the world’s largest oil consumer, and in the winter months demand is reduced,” he said.
Consumers are benefiting from a 68 per cent drop in West Texas Intermediate crude over the past 18 months. That has boosted refiners’ profit margins, encouraging them to produce record amounts of fuel. Prices are poised to remain lower into next year after the Organisation of Petroleum Exporting Countries refused to limit its output. The price of West Texas Intermediate crude dropped to $34.73 a barrel on Friday, the lowest since February 2009.
Savings
US refineries produced 9.83 million barrels a day of the motor fuel in November, 2.3 per cent higher than a year earlier, the American Petroleum Institute said Thursday.
Americans have saved about $100 billion on fuel this year, which comes to more than $350 a person, according to Michael Green, a spokesman in Washington for AAA. The drop in gasoline prices has coincided with an increase in demand, which rose to the highest level since August last week, the Energy Information Administration said Wednesday.
“It’s been a long time since we’ve seen a combination of low prices at the pump and a healthy economy,” DeHaan observed. “The last time that occurred was back in 2005.”
