Pump prices for gasoline across the country fell another four cents this morning to average $2.589 per gallon. Current trends are poised to bring prices to $2.50 by election day. This shift has huge implications for US consumers, since we spend over half a billion dollars less every day than at the peak price of $4.11 in early July ($1.50/gallon*42 gallons*9 million barrels/day). Hopefully these savings can help get Americans’ finances in order to pay our debts down and get us out of the recession. The price may fall another 20 cents, but I see a medium-term floor for prices ~$2.30-$2.50 due to the difficulty to grow oil production at today’s price below $70 per barrel.
And the glimpse of a draft IEA report had some sobering insight into long-term oil production. (more…)