Drivers have enjoyed a noticeable reduction in gas prices during the past few months from about $2.80 a gallon for regular in June to about $2.44 just before Labor Day; this trend is likely to continue for several more months. Gas prices are generally correlated with the price of crude oil which has plummeted from over $100 a barrel at the beginning of this year to about $45 a barrel now. The correlation is not anything like a one-to-one ratio, because significant other factors, such as refining and distribution costs, regulations, and gas taxes that also affect the price of gas.
But the oil price is the largest influence and is also usually the most variable, so one can normally expect a gas price decline soon if one sees news of a significant decline in the per barrel price of oil – and conversely, one can expect a gas price increase soon if one sees news of oil price increases.
The good news is expected to continue: “AAA also predicts gas prices could fall below $2 a gallon in some parts of the country by the winter holidays. There is good reason to believe that cheaper oil costs, a seasonal decline in driving and the switchover to less costly winter-blend gasoline will continue to push down prices through the end of the year.” (See CNN & Boston.com)
Consumers should realize that oil prices are volatile and could spike suddenly, leading to a gas price jump, so fuel economy should still be a significant consideration in car buying, unless one can afford lots of expensive gas.