If you see gas at less than $2 a gallon — grab it.
A number of stations in Tarrant County were selling a gallon of regular unleaded gasoline for less than $2 Thursday afternoon, making it seem like Christmas in July (or August).
But analysts, who say the drop is tied to the recent plummet in crude oil caused by last week’s downturn in the stock market, warned that it may go back up just as quickly. On Thursday, crude oil jumped nearly $4 a barrel on financial markets, making it likely that gas prices may follow.
“It is short-lived,” said John Benda, owner of the Fuel City convenience store chain in Dallas, who was selling regular unleaded for $2.17. “If you see it at $1.99, grab it. Fuel is fuel.”
AAA Texas reported that the average price statewide is $2.29, 7 cents lower than last week and 97 cents lower than a year ago. The travel and insurance agency said prices are at the lowest level for this time of year since 2004.
Among the state’s metro areas, motorists in Beaumont were paying the least, at $2.19 a gallon, while drivers in El Paso were shelling out $2.53 on average, AAA reported. The national average is $2.53, a 12-cent drop from last week and 90 cents lower than last year.
Early Thursday afternoon, the Fort Worth Gas Buddy website had 15 stations across Tarrant County selling gas below $2 a gallon, ranging from $1.91 to $1.97. Three stations, two on Fort Worth’s west side and one in White Settlement, were at $1.91.
There has been a lot of downward movement and that brought the $2 out earlier than we thought.
Patrick DeHaan, a senior petroleum analyst at GasBuddy.com
Analysts forecast that gas prices would slip below $2 by this fall, possibly Thanksgiving. They are mostly sticking with that prediction, saying some gas stations are following the stock market’s wild ride. This may be just a hiccup, they said.
The price of West Texas Intermediate crude closed up $3.96, or 10 percent, to $42.56 a barrel Thursday, its biggest daily jump in more than six years.
“There has been a lot of downward movement, and that brought the $2 gas out earlier than we thought,” said Patrick DeHaan, a senior petroleum analyst at GasBuddy.com.
“But I want to be cautious. It is very nice that it is here, but if oil rallies, the first forecast of sub-$2-a-gallon gas by Thanksgiving may be more accurate,” he said.
Gas prices are flowing up and down mostly in reaction to news out of China. Earlier this week, oil dipped to around $38 a barrel as future demand flagged because of a slowdown in China’s economy, the second-largest in the world.
Also fueling the decline are crude oil stockpiles. On Aug. 21, commercial crude oil inventory stood at 450.8 million barrels. While that was a drop of about 5.45 million barrels from the prior week, stockpiles remain at levels not seen at this time of year for at least 80 years, the U.S. Energy Information Administration has reported.
It has been a crazy week.
John Benda, owner of Fuel City, a convenience store chain
Prices really won’t start to decline until after the Labor Day weekend, when demand historically drops off, analysts say. Beginning in September, refineries also switch to a blend that includes more butane, which is cheaper to produce and plentiful, adding to the price drop.
“I don’t know if the market has taken its Prozac today, but once it wears off, I think oil prices will return to reality,” DeHaan said. “I think some gas stations get ahead of themselves because they want to be the first to hit $1.99. They sacrifice margin to be the first, and when prices go back up, they will be the first to go back up.”
Benda agrees, saying that he was buying wholesale gas at $1.88 at the beginning of the day and that by the afternoon, it had already increased 7 or 8 cents. He expects to pay $1.95 on Friday.
“It has been a crazy week,” he said.