Could gas plummet to $1 a gallon?
SMU economist Bernard Weinstein and Bruce Bullock, director of SMU's Maguire Energy Institute, talk about the effect plunging oil prices are having on the cost of gasoline.
By Ellen Chang
Crude oil prices plunged again on Thursday (Jan. 7), reaching a record 12-year low as concerns of a global slowdown led by China sparked more declines. But how low can gas price go at the pump?
The global oil glut contributed to the precipitous decline over the past 18 months that has wiped out prices by a massive 70% as they dipped to $33 a barrel on Thursday, levels last seen in 2004. As drivers in Houston saw gasoline prices tumble to $1.50 per gallon, the potential of gasoline prices weakening to a mere $1 per gallon became more of a likelihood.
“It’s not improbable that retail gasoline prices could tumble close to $1 per gallon this winter in some parts of the U.S.,” said Bernard Weinstein, a business economist at Southern Methodist University’s Cox School of Business in Dallas. . .
The potential for gasoline prices to keep plummeting “grow daily,” said Bruce Bullock, director of the Maguire Energy Institute in Dallas.
“Though unlikely, $1 a gallon gasoline in certain parts of the country is certainly not out of the realm of possibility,” he said. “The last time the U.S. enjoyed gasoline prices below $1 was in the late 1990s.”