Gas prices in Owensboro continue to fall. At the time of this writing, most gas stations in town were under $2.00/gallon.
Why? According to CNBC, US Crude Oil prices hit a 5 ½ year low on Tuesday, dropping to $52/barrel. If that trend continues to drop (as some analysts are predicting it will) to $40/barrel, we could see national averages around $1.80/gallon.
Owensboro’s already almost there. Thursday night Chuckles and Valero listed gas at $1.87 and Huck’s, Casey’s, Shell, Marathon, and Fast Lane were at $1.89. Friday morning some had already dropped again.
Those kinds of savings leave gas station owners just as happy as the customers at the pump. “I love it!” said Lee Franey, who owns four Franey’s Food Mart gas stations. “It’s good for us in two ways. One: the more money people save at the pump the more they may spend on other items. But we also save a bunch of money on credit card and debit card fees because their totals are less.”
The reason crude oil prices are dropping boils down to classic supply and demand. The US and Canada are becoming more fuel efficient. China’s economy is beginning to slow. Consumer habits have changed. We’re using less oil but they’re still supplying the same amount. Plus, the US is producing more oil. More supply and less demand equals cheaper gas.
“We base our prices on two things: wholesale price and competition. So I compare with the ‘big boys’ in town when we set our prices,” Franey explained.
This is good news for us because we’re saving at the pump. But analysts still don’t know what to expect for 2015. For now, enjoy those savings!