The global price of crude has lost more than half its value since mid-2014.
U.S. motorists are paying an average price at the gasoline pump today of $2.10 per gallon that is more than 40% lower than the 2014 peak of $3.70 reached on April 28. The national average continues to test lows not seen since May 2009. Today’s price is nine cents less than one week ago, 47 cents less than one month ago and $1.12 less than one year ago.
Without any major increases in the global price of crude oil, AAA expects the national average price for regular unleaded gasoline to remain below $3.00 per gallon in 2015.
Drivers welcome lower gas prices but economists continue to fret about the sustained low oil prices on the oil industry. In the United States where the cost of oil extraction is more expensive, oil companies may reassess their plans to factor in profit margins that are sharply lower or even reversed as markets register multi-year lows with no end in sight.
Moreover, countries that rely heavily on oil revenues to fund government services – and some of them fund terrorists – may find themselves in situations where reductions to social programs are necessary, which could lead to civil unrest. Either of these dynamics has the potential to put upward pressure on prices, in AAA’s view.
The global price of crude has lost more than half its value since mid-2014. OPEC said that it would not intervene in the market to force prices higher. It plans to sustain its current production levels, with the earliest possibility for supply reductions reportedly pushed to their next meeting scheduled for June.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
