Gas under $2 in lower 48
New York on Friday joined the other 47 states in the contiguous United States with an average gasoline price below $2 a gallon, according to a motorist group’s survey, leaving just Alaska and Hawaii above the milestone.
Nationwide, gas prices fell 0.8 cent Friday to a national average of $1.656 a gallon, according to the survey of credit card swipes conducted for AAA.
Gas prices in New York state slipped to $1.99 a gallon from $2.011 on Thursday, according to AAA.
Prices are highest in Alaska, at an average of $2.719 a gallon, and Hawaii, at $2.489. Gas was cheapest in Missouri, the only state where gas was below $1.437 a gallon on average.
Of U.S. urban areas, Kansas City, Mo. had the cheapest average gas prices at $1.324 a gallon, while the most expensive average was in Anchorage, Alaska at $2.454 a gallon on average, according to GasBuddy.com, which lets motorists post and view their local gas prices online.
The national average gas price has fallen $2.199 a gallon over the past 86 days, according to AAA. Prices are now more than $2.45, or 59.7%, below the record-high average of $4.114 a gallon reported on July 17.
Gas has been selling at the lowest average price since February 2004, according to AAA data.
But prices may be starting to bottom out, according to Jason Toews, co-founder of GasBuddy in Minneapolis.
Lower gas prices are starting to spur demand in many areas, which could see gas prices popping back up again when the spring and summer driving season hits next year, according to Toews.
"Enjoy the gas prices while they’re here," he said.
Since July, the price of gasoline has fallen along with the price of crude oil, gas’s main ingredient. Crude has fallen more than $100 a barrel since July as investors worried that the U easy payday loans.S. economy was consuming less fuel.
However the decline in the price of crude may be setting us up for a gas price "super spike" in two to four years, said Toews.
"A lot of oil fields are not economical at these lower prices," he said.
As crude prices have fallen, oil companies have cut back on exploration, and shut down production at expensive operations like the oil sands in Western Canada.
"Once demand comes back, it will make supply even more tight," said Toews.
And the greater the current recession is, the greater price spike we may see in the future, since the lower oil prices are, the more oil companies cut back, he added.
Diesel: The price of diesel fuel, which is used in most trucks and commercial vehicles, also continued to slide.
The price of diesel dropped 1.9 cents Friday to a national average of $2.575 a gallon, according to the AAA survey.
Diesel prices have fallen more than $2 a gallon since hitting a record high of $4.845 on July 17.
Ethanol: As falling demand pulled down gasoline and diesel prices, the price of E85, an 85% ethanol blend made primarily from corn, rose 0.8 cent to $1.518 a gallon on average, according to AAA.
E85 can be used in place of regular gas in specially configured "flex-fuel" vehicles, but it is not readily available in some states.
The AAA figures are state-wide averages based on credit card swipes at up to 100,000 service stations across the nation. Individual drivers may see lower fuel prices in different areas of each state.