— From staff, wire reports
Just in time for fall road trips and ahead of the holiday travel season, motorists are experiencing a brief reprieve in the rising cost of gasoline.
The price of crude oil fell to a three-month low Tuesday, a sign that investors expect a weak economy in the months ahead. A surplus of crude, however, means lower gas prices nationwide and locally.
“As upside down as this year has been, we’re finally starting to settle down a little bit,” said Clay Ingram, spokesman for AAA Alabama. “Pump prices have dropped 10 cents in the last week or so as far as the state average goes, and I think we’ll see prices drop over the next few weeks.
The average price-per-gallon of regular gas in Alabama was $3.43 on Wednesday. In Athens, prices ranged from $3.34 per gallon at Murphy USA at Walmart to $3.69 at the Chevron near the intersection of U.S. 72 and West Washington Street.
Ingram said he doubted there would be much fluctuation in prices between Thanksgiving and the end of the year. However, he said the lowered prices were not related to the Nov. 6 election.
“It’s not connected to that in any way whatsoever,” he said. “It’s a matter of this year’s slow demand catching up with the stock market. There was some panic, so there was a lot of selling of crude oil futures over the last week or two. The result will be some lower prices.”
A report issued this week speculates that the U.S. could soon overtake Saudi Arabia as the world’s biggest producer of crude oil.
Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts.
“Five years ago, if I or anyone had predicted today’s production growth, people would have thought we were crazy,” says Jim Burkhard, head of oil markets research at IHS CERA, an energy-consulting firm.
The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia's output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020, helping to make North America “the new Middle East.”
The last year the U.S. was the world's largest producer was 2002, after the Saudis drastically cut production because of low oil prices in the aftermath of 9/11. Since then, the Saudis and the Russians have been the world leaders.
The United States will still need to import lots of oil in the years ahead. Americans use 18.7 million barrels per day. But thanks to the growth in domestic production and the improving fuel efficiency of the nation’s cars and trucks, imports could fall by half by the end of the decade.