Gas prices drop due to oversupply

Drivers are smiling at the view these days, as gas prices continue to fall. DNR fuel-price analyst David Downing says it’s typical for prices at the pump to go down after summer vacation season ends, but he says there are lots of reasons why they’d go up, instead. The inventory of gasoline is 7-percent below this time last year, crude oil inventory’s down, and demand’s almost as high as last summer — three things that should mean higher prices — and Downing says the only reason they’re not is that crude oil has dropped from 30-dollars a barrel to 25 and there’s a big surge in importing. Downing says our gasoline imports are almost twice what they were last year, largely because it’s a mild winter in Europe so fuel they don’t use ends up in our markets. Downing says there’s a company that follows tankers coming from OPEC ports and estimates how much is bring produced and shipped; that company thinks OPEC nations are “cheating” on export limits and a lot of their overproduction’s headed for the U.S. Our gas prices should be from a dollar-fifty to a dollar-sixty based on the price of crude, but the market’s ignoring a lot of factors like that; and Downing adds you may have forgotten a year ago we were paying $1.13 a gallon for gasoline. While it’s hard to say how long we may keep enjoying lower gas prices, Downing points out that if there is an invasion staged against oil-producing Iraq, all bets are off.