The bad news: the economy, home prices, stocks and employment rates are falling.
The good news: gas prices are, too.
In Hampton Roads, the average price per gallon of regular gas fell to $3.29 Friday, according to auto club AAA’s Fuel Gauge Report. That’s down more than 60 cents from June’s peak of nearly $4 per gallon and about 40 cents from right after Hurricane Ike hit the Gulf Coast a month ago.
Some local stations posted prices as low as $2.96 Friday.
“It’s a relief,” said Ashley Jones, an Old Dominion University student, as she bought gas at the Miller Mart Shell station on Hampton Boulevard near the school. She said she relies on savings from her summer job to support her throughout the school year, and the money doesn’t go as far when gas prices are high.
The national average fell to $3.35 a gallon for regular and oil prices dropped to below $80 per barrel, the lowest price in a year.
Energy experts said the economy is largely responsible.
“With the financial crisis and the doom and gloom across the globe, what we’re finding is, demand is really lower,” said Ben McClenahan, general sales and marketing manager for Papco Oil Co., which supplies about 100 stations in the region.
Unemployment also is contributing to low demand, which drives down prices, said Mary Novak, managing director of energy services for Global Insight, an economic forecasting firm.
“You spend a tremendous amount of gasoline going to work,” Novak said. “With fewer people working, you have less demand for oil.”
The decline is one bit of good news for consumers, hit hard by higher prices in stores, job losses and other economic fallout.
Gas prices began dropping in July, but spiked again last month when hurricanes disrupted production at Gulf Coast oil refineries. In Hampton Roads, that caused some gas shortages and prices rose above $3.70 per gallon.
At Miller Oil Co., which operates more than 30 local gas stations, the shortages meant it only received about 70 percent of its usual gas shipments from some suppliers, said Jeff Miller, the Norfolk-based company’s president. But shipments returned to 100 percent this week, he said. “That has taken some of the pressure off.”
Gas prices should continue to fall over the next few weeks, and will likely bottom out as the stock market hits a low mark as well, energy experts predicted.
“Short of the stock market making a strong recovery, I think we’re going to see some low prices here for a while,” Miller said. “Demand is going to continue to be off.”
In the meantime, drivers are enjoying the relief.
“I’m thrilled,” said Joel Rubin, who owns a public relations firm in Virginia Beach, as he filled up at the Exxon station on Virginia Beach Boulevard . “When I saw it, I said, 'I’m going to fill up right now.’”
Kathy Adams, (757) 446-2583, kathy.adams@pilotonline.com
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What About Diesel?
So the gas prices drop and the diesel prices barely move at all?!?!?!? I'm still paying more for diesel than gas and it is cheaper to make?!?!?!
Was that serious?
It's a Republican ploy to win votes. November 5th, they'll be through the roof.
Was that serious or sarcastic? I'd be interested in how Republicans could have such a massive and global influence on markets. Which Republicans was it and exactly what did they do? If they were that all powerful, wouldn't they also apply that to other markets, since it's obvious voters irrationally choose a candidate based on unrelated economic news?
Well NPD...
It was the market that created the desire for the Hybrids and "smart cars" as soon as gas hit over 3 bucks the amount of sales for these cars went through the roof. So it will be interesting to see what the Market, you and I, want now that gas is falling. If the market desires SUVs then yeap, they'll be back. But if the market, you and I, decide that we only want to be scared once then these cars will continue on in the march to market.
Why is it so hard to see that the auto makers are not shoving down our throats one car or truck over another? It's company suicide to make a product that "no one wants". If the demand for SUVs continues to fall then it would be asinine to continue to make them in such numbers. And vice versa.
michaels you are mistaken
The only memory I have of my comment was with my niece. I wasn't trying to blame Republicans. And another thing, I won't continue to defend my comments to anyone. Sorry, if you didn't get it.
Stock Market
Regardless of what the gas prices are, the economy will not start to improve until investor confidence has returned... If the stock market crashes and causes a panic, no amount of federal bailout money will stop a new Depression.
Gertz
You get called out for making a horribly innacurate comment about basic economics and your only defense is to blame Republicans? It must be true then... Republicans dumb, Democrats smart. How lame!
len
"Where did you hear that cutting back on demand would increase the gas price?
I have to admit, that is a new twist on economic realities."
I honestly don't remember. I do recall a conversation with my niece who is as Republican as George Bush. Sorry, I can't help beyond that.
So are SUV's back in now??
Does Ford and GM still transition over to 'smart' cars now that oil prices are collapsing, or do they continue on with transition?
CS, since we are correcting
CS, since we are correcting people, you are right except for the point that you mean Quantity demanded instead of demand. Two different things. But overall you are correct. I also saw on another board that they thing OPEC is cutting supply to raise the demand. It is funny how many people do not understand fundamental economics.
Actually Gertz does have a point...
Albiet the wrong point. Congress has stated since we are driving less they need to increase taxes on gas because people are doing what they've told us to do all along. That is, to stop driving so much and conserve. So our gift from Congress and Environmentalists is higher taxes on fuel because we are driving less.
So if they get what they want, our gas prices will go up...
False
Economic fact: Gas never goes down as fast as it goes up.
That's a false statement as easily checked by looking at index graphs.
http://www.bloomberg.com/markets/commodities/cfutures.html
Economic fact: Gas never
Economic fact: Gas never goes down as fast as it goes up. People have become complacent and are not rewarding gas retailers whose prices truly reflect market conditions. Higher futures wholesale prices are generally reflected at the pump immediately. Lower futures take weeks to be reflected at the pump.
Govt Intervention!
Yea ok gas prices have all of a sudden dropped so much! It is time for govt to step in and end control the monopoly the oil companiaes have on us all. Enough is enough!
simple economics
I have to admit I've never heard anyone say that lower demand would increase the price of oil. It's a basic principle of economics. It's the supply and demand curve. See, when demand goes down so does the price of a given product or commodity (assuming supply remains constant).
Gertz, if some politician or government official said the opposite, I'd love to know who it was. I sincerely hope he doesn't work in the economic sector.
Gertz Point
Where did you hear that cutting back on demand would increase the gas price?
I have to admit, that is a new twist on economic realities.
and they said that wouldn't work
“You spend a tremendous amount of gasoline going to work,” she said. “With fewer people working, you have less demand for oil.”
We have been told over and over that cutting back would only INCREASE the price, but it appears once againg our Government is wrong.
Nope
No, that reserves were actually piped down to a massive tank below area 51. The gas prices things was a government conspiracy to make an excuse to redirect large amounts of petroleum to secret experiments. They account for it by saying it was used by all the government vehicles but all of them really use that engine that runs on water.
A couple of things
Don, this is not a so-called meltdown. The credit markets are frozen for a reason. With gas, it should be noted that supplies are artificially down. The amount of gas reserves is over half of what it should be -- which is why we witnessed the hike in price after the recent hurricanes. The story received little press, but is one example of how refineries are manipulating the market. They want to produce less and charge us more, while crying shortage at the same time.
It's a Republican ploy to
It's a Republican ploy to win votes. November 5th, they'll be through the roof.
Why are the gas companies getting away with gouging us now?
Because they can. Same with everything else with prices racheted upwards -- they all jump on the price hike bandwagon and do it to us because they can.
A Great time....
To buy some stock at a bargin...
stupid paper, stupid stupid paper
what difference if the price of anything goes down as a result of the financial downturn, rising unemployment etc. no one will be able to afford it regardless of the cost and epretty much everyone is aware of the current state of affairs. stupid headline -
Dr. Tabor, you are 100%
Dr. Tabor, you are 100% correct. Could not have said it any better myself. We are back to 2002/2003 levels. I still believe oil has about $15-$20 to decline and houses have about another 20-25% to decline for our markets to begin to act normal again.
Future
The last time a barrel of oil was under $80.00 the price of gas was down around $2.50 a gallon. Why are the gas companies getting away with gouging us now?
It's called a "future" which means the deal happens in the future. Unleaded futures are at a $1.85 which will put the retail price at about $2.23 after taxes. Economics is not a conspiracy.
3 WORDS!!!
IT'S ELECTION TIME!
Still being ripped off
The last time a barrel of oil was under $80.00 the price of gas was down around $2.50 a gallon. Why are the gas companies getting away with gouging us now?
Did you check the numbers?
Demand has not dropped more than a couple of percent, nor has supply increased any more. Neither can explain the fall in crude prices of $50+.
Note that at the same time, the Dow has fallen proportionately. Does it not make more sense that oil, and the companies represented by the Dow, have not really lost value so much as the dollar has gained value?
The so-called financial meltdown is not what it seems. What has happened is that a couple of trillion imaginary dollars ceased to exist when people no longer believed in them, and the remaining dollars became more valuable.
Remember that the true measure of your wealth is not how many dollars you have, but how much the dollars you have will buy.