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Lower oil prices mean cheaper gas

Eve Troeh Aug 10, 2011
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Lower oil prices mean cheaper gas

Eve Troeh Aug 10, 2011
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JEREMY HOBSON: Oil prices are down almost 20 percent this month. That means gas prices will be going down, as well.

From the Marketplace Sustainability Desk, Eve Troeh reports.


Eve Troeh: No, those numbers are no mirage: gas is cheaper. And don’t bother rushing to fill up, either. Prices will be low tomorrow, too.

Carl Larry: Yes, they will stick.

Carl Larry at Blue Ocean Brokerage says we’ll sink toward $3 a gallon probably until the end of the year.

But oil’s already headed back up from its 20 percent drop. Greg Daco at IHS Global Insight says that means gas prices won’t tumble too far.

Greg Daco: What you’re going to get is a gradual decline in gasoline prices, and that is going to help consumers.

Because as people see gas prices shrink:

Daco: They will have a feeling that they’re a little bit richer and that they have more money to spend on other things.

That little feeling we like to call “consumer confidence.” But, Daco says, that confidence flew out the window fast when gas hit $4 a gallon. It’ll take weeks or months of lower gas prices for it to come back.

I’m Eve Troeh for Marketplace.

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