While many Americans were busy celebrating Thanksgiving with family and friends, OPEC member countries were busy quibbling in Vienna, Austria, at their scheduled meeting to decide whether or not to cut oil production because of low prices. By now you know their decision was not to cut production, and wow, did crude prices react violently: dropping nearly $8/bbl, falling in after hours trading to $64/bbl.
So what’s next for motorists? It’s obvious: the decline at the pump will continue across all 50 states, and it has. One gas station in Oklahoma City, Ark. dropped to $1.99 Wednesday. Later that day, another gas station just down the street lowered theirs to $1.98.
As things stand this week, the national average has fallen to $2.718/gallon, down a whopping 24.5c/gal in the last month, and 55.1c/gal below last year’s price. Americans are spending almost $200 million less every day than they were last year.
The national average may drop into the $2.50s by Christmas, and half a dozen states may see a few stations under $2/gal by that time, but $1.99/gal prospects are still weak for motorists far outside the Gulf Coast region.
Washington is still among the top five highest averages (all slightly above $3/gallon) in the country, with an average of $3.07/gallon
Most states will see declines ranging from 5c-15c/gal in the week ahead. Some states will see larger price declines than others. This is simply because of competition being stronger in some areas than others. Most states will see pumps prices 10-25c/gal lower by mid-December than where they are today.
“Oil prices have been demolished in the last 72 hours as OPEC decided against a production cut, which will open the flood gates to even more gas price declines,” said Patrick DeHaan, senior petroleum analyst with GasBuddy.
“In my decade of watching oil and gasoline prices, I don’t think I’ve seen as steep a decline in a 48 hour time frame as what we saw on Thanksgiving Day and into last Friday as OPEC put off any decrease in production. This is perhaps one of the most astonishing weeks in watching crude prices I’ve ever witnessed, and motorists will likely be giddy at what I see in our gas price crystal ball: a 15-25 cent drop over the next several weeks, bringing the national average down to the $2.50s by Christmas,” he noted.