Americans can expect gasoline prices to drop as school buses start rolling through neighborhoods across the country. With most family vacations wrapping up and teen drivers back in classes, gasoline demand will wane and prices should fall after Labor Day.
There is good news at the gas pump, as Americans get ready to fill their cars, RVs and boats for the Labor Day weekend. The national average price for gasoline has been falling steadily this month, reaching $2.678 for a gallon of unleaded on Monday, according to AAA, Wright Express and Oil Price Information Service.
West Texas Intermediate crude oil, which had been selling for $105 a barrel at the end of March, fell to $80 a barrel last week, while Brent has come from $125 down to near $90. These price declines will translate into substantial savings for U.S. consumers in the weeks ahead.
Two weeks ago, I commented on the tendency of U.S. retail gasoline prices to follow the price of Brent crude oil, anticipating on the basis of the price of Brent, then at $91.50, that we might expect to see average U.S. retail gasoline prices, then at $3.47, to fall an additional 35 cents/gallon. The gasoline price has since come down about 11 cents. But with Brent now surging back up near $100, this is about all we can expect.
Don't expect a big impact on gasoline prices from opening up an oil pipeline to the coast.
I am a little late to this debate   , but I wanted to highlight something that is clear from basic international trade theory. Opening up to international trade changes relative prices, and in fact raises some prices.
High gasoline prices will fall once Americans start to conserve and they start to innovate. In the batter's box: gas-to-liquids, or GTL, which can be used to power everything from buses to trucks to planes. Two key factors are at play. First oil prices are at $115 a barrel and second, natural gas is abundant ...
By Harlan Levy:Bank of America chief economist Mickey D. Levy analyzes and forecasts national and international economic performance and financial market behavior and conducts research on monetary and fiscal policies. Levy, a widely quoted economic observer, is also an adviser to several Federal Reserve banks.