[duckman]

hxxp://www.newsok.com/article/2837234/?print=1

$2 gas? Experts differ on possibility


By Adam Wilmoth
The Oklahoman

Falling fuel prices caused Helen Hays to rush to the nearest gasoline station Friday afternoon.

"I'm tickled to death. That's why I'm filling up right now," Hays said while filling up at $2.70 a gallon. "I'm afraid to take the chance that I'll get up in the morning and the price will be up again. I'm going to grab it while it's at this price."

After climbing steadily for much of the year, Oklahoma's average gasoline price has slipped 21 cents over the past 18 days, according to AAA statistics. Industry analysts say the price could continue falling over the next few days and weeks as long as there are no major supply disruptions.

"All the stars are in proper alignment," AAA Oklahoma spokesman Chuck Mai said. "We are enjoying reduced demand because the summer driving season is all but over, and we have greater gasoline inventories than were expected. It looks like Iran is ready to negotiate over their plans for nuclear energy. The cease-fire agreement is still holding between Israel and Hezbollah."

Mai said prices could fall to below $2 in the fall, as long as there are no hurricanes or other supply problems.

"The forces that drove the price up are still with us," he said. "We are still seeing strong demand and booming economies in China and India. But if we see those countries' demand drop due to the high prices, and if we can open up some additional sources of oil in this country, which Congress seems ready to do, then that optimism could translate into lower prices by the end of 2006 and early 2007. I don't know if it will get down below $2, but it's not totally out of the question."

Bruce Bell, chairman of the Mid-Continent Oil and Gas Association of Oklahoma, said prices likely will continue to fall over the next few weeks, but he said $2 gasoline is unlikely anytime soon.

"I wish it would go down that far, but I don't see that happening anytime soon," he said. "Barring a global depression, there is too much growth in gasoline demand for the price to fall that far. But I do think prices will continue to decline, following the price reduction in crude oil and the wholesale price of gasoline."

Recent prices

Oklahoma's statewide average price for a gallon of regular unleaded gasoline fell to about $2.79 a gallon on Friday, down from more than $2.98 on Aug. 8. Friday's national average was $2.89, down from almost $3.04 two weeks ago.

Consumers in the Oklahoma City metro area paid an average price of nearly $2.76 on Friday, down from almost $2.97 on Aug. 6. Prices at individual stations, however, fell as low as $2.49 a gallon, according to gasbuddy.com.

In Tulsa, Friday's average price was $2.73, down from $2.97 on Aug. 7. The lowest price in the Tulsa area was $2.62 on Friday afternoon.

Lower prices could lead to significant savings for Evan Hill of Oklahoma City. "I do less driving now than I used to," he said while filling up his SUV at $2.70 a gallon. "If prices keep going down, we could go out for dinner more than we do now."