Juli Niemann: Gas prices should fall soon
An Exxon gas station near the Watergate complex in Washington, DC.
Adriene Hill: Oil prices have fallen below $76 a barrel today -- the lowest level in more than a year.
For more we turn to Juli Niemann, an analyst at Smith Moore and Company in St. Louis. She joins us now live. Good morning, Juli.
Juli Niemann: Morning, Adriene.
Hill: What's going on with gas prices?
Niemann: Well, gasoline today, nationally, is averaging about $3.41 a gallon. That's a 25 cent drop over the last couple of weeks. And here in St.Louis, last night, I paid $2.98 a gallon -- high excitement there. But gasoline is actually priced off of Brent crude, which is a little under $100 today -- look for Brent to continue to fall, though. And lower prices are coming to a station near you very shortly.
Hill: Why is that?
Niemann: Well a couple of reasons. First, is the recession. It's still continuing on, we have no real recovery. And high prices have already hurt a really injured consumer. We use less, we can't afford joy riding -- even our kids aren't driving as much. And OPEC wants to keep the prices high, so they'll try and cut production. And by the way, big oil loves this because OPEC does all their dirty work for them -- they can continue to produce at full tilt. But we have a good supply of oil, just not much demand.
And secondly, it's the shoulder season. Now spring, you have no driving and even less heating; in the summer, high driving, no heating; winter you have a lot of heating. And we're in the fall here, where you have less driving, and still not heating. When you get to the shoulder seasons, prices come down anyway. So that's the only cheery news I have for you this morning.
Hill: Juli Neimann is an analyst at Smith Moore and Company in St. Louis. Thanks so much.
Niemann: You bet.