Gas prices are down and they are going to continuing sliding according to one prominent oil industry analyst. In fact, gas prices could fall below $2 per gallon when a magic mid-September date arrives.
“There will be thousands, even tens of thousands of stations below $2 by the time we’re into football season,” Tom Kloza, chief oil analyst for the Oil Price Information Service, told CNN.
In the last month gas prices have fallen by 6% to $2.59 per gallon while oil prices have fallen by an even larger 16%. The only reason gas prices have not adjusted to lower oil prices is because manufacturers are required to use a more expensive summer blend through September 15.
If the lower gas prices arrive it could reduce prices by “60 or 70 cents” from today’s prices, says Kloza.
Last winter gas prices hit a low of $2.03 and this winter, with unprecedented gas price drops, we could see gas below the $2 mark.
With China’s economy in shambles, OPEC continuing to push out a huge amount of oil, and North American shale producers finding new oil every day, demand may be down over the winter months while supply continues to remain steady or even increase. With a near perfect storm of economic conditions, gas prices could very well continue to tumble.
If a nuclear deal is actually reached with Iran and sanctions are lifted, that country will again be able to sell its oil on the open market, leading to even more supply and a likely decrease in oil prices yet again.