Do you remember when the term “gas war” referred to competing service stations at intersections dropping their prices to lure customers away from the station across the street?
I read recently something like that happened in Oklahoma City, dropping the price of gasoline to less than $2 per gallon.
Good deal, right?
Well, the term has taken on a more global meaning. The energy price war is causing serious declines in the price of gasoline in the United States. It dropped to $2.15 per gallon today in Amarillo and it’s likely to drop even more. Heck, it might have dropped another penny or two since I got home today a little after noon.
OPEC recently refused to cut production. The supply of crude oil remains quite high, while demand is declining. Add to that the surging U.S. energy production, which is about to make the United States the world’s largest producer of petroleum in the world, surpassing Saudi Arabia as No. 1.
We can thank (or blame) the fracking that’s going on in West Texas and in North Dakota and Montana, which are seeing a huge boom in the production of shale oil.
Although I am acutely aware that the decline in oil makes it more difficult for producers to keep pumping it out of the ground, I also am grateful to be paying a dollar or more less for gasoline than I was paying a year ago. It’s freeing up some disposable income in our house.
Someone will have to tell more once again why this oil price decline somehow is bad news.