Posted by: David Kiley on November 5, 2008
Don’t look now, but some U.S. drivers are finding gasoline today priced at less than $2.00 per gallon.
How’d that happen? I was moved to check the national scene when I found gas prices at $2.05 at some stations in Ann Arbor, MI.
A quick look at local gas prices on www.mapquest.com, and I found $1.94 in parts of New Jersey, like the town of Malaga. $1.69 in Mason, OH. $1.75 in Independence, MO. $1.71 in Laredo, TX.
According to www.eia.doe.gov, the national average this week is $2.40 for regular gas.. On the west coast, the average is still around $2.70. But obviously there are better bargains to be had.
The feelings among automakers are mixed. Such a huge drop in gas prices means the equivalent of an extra stimulus package for beleaguered consumers. While all the automakers have smaller, fuel efficient cars in the way, the Big Three U.S. automakers and their dealers still have a lot of heavily incentive laden SUVs and pickup trucks to sell. The drop in gas prices, combined with a new round of even more aggressive prices on these vehicles in the next two months could move a bunch of inventory off the lots.
The problem will be the availability of credit. Even if people want to take the plunge on a Ford Explorer, or Saturn Outlook while gas is hovering near $2.00 and take advantage of thousands of dollars in discounts, they might have trouble getting the loan unless their credit score is A+ perfect.
Ford, for one, is not overly concerned that the gas prices will derail in any way the company’s plans for a new group of small and smallish-mid-sized vehicles. “Yopu certainly can’t plan a future product plan around this month’s gas prices,” says Ford’s chief sales analyst George Pipas.
Oil dropped nearly 7 percent to below $66 a barrel on Wednesday after a U.S. government report showed rising fuel stockpiles and slowing demand in the world’s top energy consumer.
Gasoline stocks rose by 1.1 million barrels last week, against analyst forecasts of a draw, as demand for the fuel fell 2.3 percent over four-week period to October 31, the Energy Information Administration said.