$3 a gallon here to stay?
Across the country the average price of gasoline has dropped almost a dollar in the past month and is thirty-five cents lower than a year ago. Now at least one oil executive is predicting pump prices will hover around $3 a gallon.
Hmmm...when the person making the prediction gains when prices do not continue to fall, I am a little skeptical. But here is what the Associated Press reported in BusinessWeek.
"Jim Mulva, the chairman and chief executive of ConocoPhillips, on Wednesday said gas prices rose too much too fast over the summer and are now dropping too much," the story says. "He told The Associated Press a $3 price would balance supply and demand, allow oil companies to fund further research and satisfy drivers weary of high prices."
Even if gas seems cheap, it is all relative. Which means it is still a good idea to find the best pump prices before you fill up. I like MSN's gas price map. A green marker points out the lowest price, a red marker points out the highest. Stations with prices in between appear in gray.
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About The Bargain Hunter
Daily News staff writer Julia Scott loves to find bargains on everything from groceries to Gucci. Her tips will help keep your hard earned cash where it belongs - in your pocket.
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I don't feel for Mulva at ConocoPhillips/Union 76, but I do get his point. If oil drops to a level where they don't have the funds to reiinvest in their business (as was the case for most of the 90's and into the early part of this decade), then no matter who ends up in Washington, the oil companies wont have the capital to expand drilling operations. I can remember oil in the high teens and low 20's per barrel not that lonng ago.
Like it or not, oil prices have to be at a sustainable level in order to afford the expenditure to drill. Drilling is by no means cheap.
If I were writing the rule going forward, the oil & gas companies would have to agree contractually that any production gained from government lands could only be used or sold for use within the United States and our allies (Canada, UK, Austrailia, Japan, the EU, etc.). Also, the oil companies MUST add additional refining capacity throughout the nation to manage growth, and the replacement of old and worn out refineries.
It was great going to Coscto in Burbank tonight and pumping regular for $2.48 a gallon! Then add the Costco/AMEX card rebate on gas purchases of 3%, brings the net price to $2.41 a gallon.
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