Global Oil Prices Plunging, Analysts Predict Big Drop in Gas Prices
This week, oil markets around the world, took a plunge with Wednesday’s drop coming in at an estimated 5.6% to $84.22 per barrel. Crude dropped even further in the last couple of days sinking as low as $82 per barrel. It marked the steepest one-day drop in more than a year. Prices dropped another 2% in Thursday trading.
Trick or Treat?
Some analysts are predicting a drop at the gas pumps of as much as $.25 by Halloween. One particular study said retail prices should fall each day between 1.5 and 2.5 cents through the end of the month.
One trigger that analysts have been watching is a government report released on Wednesday that showed gas inventories are soaring around the world. That report sparked fears that there could be a weakened demand for gas. The report says drivers should enjoy the next 4 to 5 months with prices going up to start next year.
A double-edged sword?
Lower oil prices have historically hurt the local Lafayette economy, and the oil and gas companies based in Lafayette. But, recent diversification in the economy means it may not be as big of a hit as it once was.
A recent report from the US EIA says that the need for gasoline is growing despite the use of alternative fuels and battery-powered cars:
According to statistics from the US EIA, the transportation industry accounts for 60% of total gasoline consumption in 2021 and in this sector, gasoline accounts for 90% of oil consumption. Factors such as increasing urbanization and rising disposable income have led to increased use of passenger vehicles, which means increased demand for gasoline. Additionally, to accommodate the increasing rate of urbanization, the road transportation network has undergone growth and modernization.