Gas under $2 not expected

Published 8:33 pm Monday, December 22, 2014

The price of gas has been an early Christmas gift for motorists — especially those traveling for the holidays — but the recent large declines aren’t likely to continue, at least according to one analyst.

“We’re likely in the seventh or eighth inning of this gas-price decline,” said Patrick DeHaan, senior petroleum analyst with GasBuddy. “We’re real close to seeing the end of the decline, because oil prices in the last week or so haven’t dropped a whole lot more.”

The average price for regular gas in the Hampton Roads area is currently $2.32, according to AAA. That’s 87 cents below last year and 42 cents under last month.

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The steady decline in gas prices has been the longest consecutive streak of falling prices on record, AAA stated in a press release. The national average has fallen 88 days in a row, since Sept. 25. Monday’s national average of $2.39 is the lowest since May 2009.

The previous record for consecutive days with prices in decline was 86, set in 2008.

“Lower prices at the pump will make taking that holiday trip to visit family or friends less of a strain on the budget,” said Georjeane Blumling, vice president of public affairs for AAA Tidewater Virginia. She added it’s “a nice Christmas bonus for the end of the year.”

AAA said consumers nationwide are saving more than $450 million per day on gasoline, compared to the highs earlier this year. The auto club predicts prices dropping another 10 to 15 cents by New Year’s Day.

DeHaan said he “feels like the Grinch” when he tells people their area — Hampton Roads included — may not see $2 per gallon gasoline anytime soon.

“Right now, I don’t think there’s enough steam there to get under $2 a gallon, but that could change,” he said. “We really need oil prices to take another sharp drop.”

He noted oil prices closed last week having risen slightly.

Even so, DeHaan softened the blow with some good news — prices should remain under $3 a gallon for the next several months, he said.

DeHaan attributed the long-lasting decline to Saudi support for lower crude prices.

“The Saudis at the end of September made comments they were cutting crude oil prices for October,” he said. “The Saudis, who used to cheerlead higher prices, are cheerleading lower prices. It’s causing a huge correction in oil prices.”

AAA warned that sustained low prices have the potential to affect supply by slowing production in higher-cost regions, including the United States. They could also lead to lower revenue streams for countries that depend on oil income, resulting in civil unrest.

Even so, travelers are set to take advantage of the prices while they last, according to AAA. About 98.6 million Americans are set to hit the road this holiday season, according to a press release from the auto club.