Christmas is coming early for the nation’s motorists.
AAA reported that gas prices are now the lowest since February 2011 and have dropped 41 cents since Labor Day, which marks the unofficial end of the summer driving season, and all indications are that prices will continue to fall into the new year.
In North Carolina, prices are down an average of 10 cents from last month and 21 cents from last year.
Experts said several factors are contributing to the steady drop.
A glut of oil on the world market, driven in part by ramped up drilling efforts in the United States, coupled with soft demand in most global economies means the law of supply and demand is working in the consumer’s favor.
U.S. demand also is leveling off as a stubbornly high unemployment rate means there are fewer people driving to work. The lingering effects of the recent recession also means people aren’t looking to live as far away from work as before, meaning they aren’t commuting as far.
AAA said that about one-in-four gas stations are now selling gas for less than $3 per gallon. North Carolina motorists probably won’t see that, with gas averaging $3.19 a gallon as of Thursday, matching the national average. In and around Havelock, gas prices Thursday were around $3.22 a gallon.
All indicators point to the downward pressure on prices to continue.
U.S. crude oil prices on Thursday hovered near $93 a barrel. It was $104 a barrel in early October.
Concerns that the Federal Reserve could start reducing its bond purchases, which are meant to stimulate economic growth, was one factor weighing on oil prices. The stimulus measures have helped boost the price of oil and other commodities, attracting investors hoping for better returns than the low interest rates on bonds, reported The Associated Press.
With the current trends, the national average should continue to close in on $3 - but most analysts don't expect it to drop below before the year is out.
AAA said it expects the national average to hit $3.10 before the end of 2013.
Gareth McGrath is a reporter for the Wilmington Star News.