There’s some good news behind the discouraging headlines on the economy: Gas is getting cheaper. It’s dropped to $2.99 in some areas of South Carolina and could soon fall below $3 in a handful of Southern states.
A plunge in oil prices has knocked more than 30 cents off the price of a gallon of gas in most parts of the United States since early April. The national average is now $3.61. Experts say it could drop to at least $3.40 before Labor Day.
If Americans spend less filing their tanks, they’ll have more money for discretionary purchases. The downside? Lower oil and gas prices are symptoms of weakening economic conditions in the United States and around the globe.
On Friday, oil plunged nearly 4 percent as a bleak report on U.S. job growth heightened worries about a slowing global economy and waning oil demand. Sobering economic news from China and Europe contributed to the drop.
West Texas Intermediate, the benchmark for oil in the United States, fell $3.30, or 3.7 percent, to $83.23 per barrel, the lowest price since early October. The drop adds to a 17 percent decline in May. Brent crude, which is used to price international oil, lost $3.44, or 3.4 percent, to $98.43 per barrel, its lowest price since January 2011.
That means some relief at the pump for U.S. drivers, even if they’re worried about jobs. Auto club AAA says pump prices fell nearly 5 percent in May, the largest monthly percentage drop since November last year. Some station owners in South Carolina on Friday even presented drivers with a magic number: $2.99.
While lower gas prices will help consumers’ budgets, it’s questionable how much they’ll boost overall confidence.
“If you don’t have a job, it doesn’t matter if gasoline prices are $5 or $2 a gallon,” said Phil Flynn, an analyst for the Price Futures Group.
Energy futures fell across the board, as did global stock markets. Heating oil fell 7.53 cents to $2.628 per gallon, gasoline futures fell 6.59 cents to $2.657 per gallon and natural gas dropped 9.6 cents to $2.326 per 1,000 cubic feet.