According to some analysts, it looks like cheaper gas in the future will become a reality. This is in marked contrast to earlier this year, where many pundits were talking about $4.00 plus prices becoming the norm.
Then, supply and demand was seen as the major issue, with many talking about the growing oil needs of China and India, plus tensions in the Middle East, notably Iran, as having a major impact on rising prices.
Now however, some analysts believe the global economy shows signs of slowing once again, which will likely cause a drop in oil consumption. An easing situation with Iran is also seen as another factor in the current price decline.
At the start of this month, a barrel of Brent Crude was priced at $120; currently its hovering around $100 a barrel. Meanwhile, the American Automobile Association, says the average nationwide price for a gallon of regular gasoline is at $3.84, down from a peak of $3.95 earlier this year.
On the flip side, with East Coast refinery capacity still limited and the threat of more closures (which could severely hamper the output of expensive sweet, light crude), there’s still a chance prices could swing back up again next month. At least that’s the stance some analysts at Merill Lynch are taking, based on a recent statement issued by the company.